Moles

Lord Kimball: asked Her Majesty's Government:
	Whether they will seek derogation of the appropriate European directive to permit the use of strychnine for the control of moles after 6 September 2006.

Lord Bach: My Lords, the Health and Safety Executive, as the UK competent authority, received a request for derogation from the Biocidal Products Directive from the industry on 12 January 2006 on the ground of "essential use". That is being considered. If a suitable case for derogation has been made, it will be put to the European Commission and the member states for consideration.

Lord Kimball: My Lords, I thank the Minister for that reply, but it is not really good enough. There is an explosion of moles throughout England. On 6 September, licensed pest controllers could use only Phostoxin. It costs six times as much and is 10 times less efficient than worms dressed with strychnine. I hope that the derogation will continue.

Lord Bach: My Lords, the noble Lord will understand that I can say very little at the moment because the matter is before the Health and Safety Executive. We acknowledge that strychnine is an effective means of control, but the over-riding considerations are of course the safety and humaneness of the chemical and the availability of alternatives.

Lord Marsh: My Lords, does the Minister agree that it is not simply a question of the chemical? I declare an interest as someone who spends a great deal of time trying to exterminate the velvet-clad monsters. They exist in very large numbers, and they produce large nurseries that are impossible to see. They will go straight through a tractor mower and throw people over—I have had experience of this, although not with me sitting on the mower—and there is no other way of controlling them.

Lord Bach: My Lords, there is no doubt that they cause a lot of inconvenience to a lot of people. On the other hand, many people find them very agreeable animals, although sometimes more at a distance than close to. There are alternative methods, however; one is phosphide gas, which I am told is used widely in northern Europe to achieve the same rather grisly end.

Baroness Miller of Chilthorne Domer: My Lords, the Minister mentioned cost-effectiveness, but does he agree that, if we did not balance that with humane methods, we would not have the highest standards of animal welfare in our farmed animals of anywhere in the world, and that that is a major consideration when dealing with methods of controlling wildlife?

Lord Bach: My Lords, I agree entirely, which is why I answered the noble Lord, Lord Kimball, as I did.

Lord Lawson of Blaby: My Lords, is the Minister aware that it is a genuinely European question? My noble friend Lord Kimball mentioned the explosion of moles in England. My experience at my home in France is that there is a similar phenomenon there this year. It has never been as bad as it is this year, so what effort is the Minister making to get French support for this important derogation?

Lord Bach: My Lords, I have not yet made any attempt to get French support. Given the noble Lord's comments, I shall ensure that we are on to the embassy straight away.

Baroness Masham of Ilton: My Lords, I declare an interest as we have millions of moles. Why has there been this extraordinary increase in the past few years?

Lord Bach: My Lords, I suspect that it may have something to do with natural breeding.

Viscount Montgomery of Alamein: My Lords, is the Minister aware that another good method of control is old-fashioned traps? In domestic situations with which I am more familiar than other noble Lords, my wife some years ago became a considerable expert on this matter and was very successful, too. However, as we now have no grassland, she has retired and is not available for advice.

Lord Bach: My Lords, I am sorry to hear that.

Lord Crickhowell: My Lords, I declare an interest as one who employs a professional mole killer to try to deal with the plague of moles that do grave damage to the agricultural land around my property and then advance like a Napoleonic army into my garden. Is there any evidence that people have been hurt or injured in any way by the use of strychnine and that there is a threat to human safety? Can the Minister tell the House that he will take the matter very seriously?

Lord Bach: My Lords, the noble Lord is right that this is a serious matter for many farmers and for householders too. In some examples, strychnine has been considered to have been abused. One involved dogs and another foxes. In 2005, some other cases, which are not yet in the public domain, involved suggestions of abuse. This is a serious problem, but there are some cases in which strychnine has been abused.

Lord Campbell-Savours: My Lords, is this not a rather heavy-handed way of dealing with the problem from Whitehall?

Lord Bach: My Lords, I am rather disappointed that my noble friend should think it is heavy. I thought the approach of Whitehall on this—waiting to see whether derogation was appropriate—was a light touch.

Baroness Byford: My Lords, following the suggestion that traps can be used to catch moles, does the Minister accept that in the pure agricultural sense it is impossible? You cannot put in enough traps, so it is not an option. Does the Minister not accept that it is a pity that the Government did not lobby earlier so that this suggestion was nipped in the bud?

Lord Bach: My Lords, I thought that I was going to agree with the noble Baroness. I agree with the first part of her question that traps are not suitable for farms. That is why we have used the method that we have and maybe we must look for another. I certainly do not accept for a moment that we have been tardy about this.

Lord Boston of Faversham: My Lords, will the Minister accept that I do not usually regard myself as an excessively violent person, but like my noble friend Lord Marsh, I spend a certain amount of time trying to exterminate these creatures? Does the Minister know that there is a simple, small electronic cylindrical device which, if inserted into the ground, is very effective? When I heard about it, I was very sceptical.

Lord Bach: My Lords, I must confess that I did not know, but I know now, as does the House.

Water Supply

Lord Trefgarne: asked Her Majesty's Government:
	What are their short and long-term plans for management of water supplies in the south of England, in the light of low reservoir levels in the region.

Lord Bach: My Lords, each water company has a drought plan to manage short-term water shortages that contains various triggers to be used depending on the severity of the drought. The provision of drought plans became a statutory requirement in October 2005.
	Water companies also have 25-year water resource plans that seek to balance supply and anticipated demand. They are voluntary plans but will become a statutory requirement under the provisions of the Water Act 2003.

Lord Trefgarne: My Lords, I am greatly obliged to the Minister. Is there not now an acute problem in the south-east of England, not only in the short term because of the limited rainfall of recent months but in the longer term, given particularly the Government's plans to build a large number of new residences in the south-east, which will require more water?

Lord Bach: My Lords, there has certainly been a drought in the south-east of England for around 15 months; it continued through the winter. Throughout much of south-east England this summer there may be the worst drought since 1976. About 70 per cent of water supplies in the south come from ground water—as the noble Lord will know—as opposed to rivers and reservoirs, which depend on rainfall to replenish.
	With regard to sustainable communities, some extra water resources are planned to meet future demand, including the additional housing to which the noble Lord referred. They are set out in the long-term plans—the water companies' 25-year water resource plans.

Lord Borrie: My Lords, does the Minister agree that serious droughts occur frequently, not just in 1976 but in many recent years; and is it not time that we moved from voluntary to compulsory water metering throughout the country?

Lord Bach: My Lords, my noble friend is right to say that droughts occur frequently and will continue to do so. Metering is an important issue on which there has been much publicity recently. It has an important role to play in demand management and helping to increase customer awareness of the amount and cost of the water that they use. We are leading on work for the Water Saving Group, which will take forward action for increasing metering in particular areas and improving understanding and the delivering of metering generally. But not every customer saves money from having a meter, so one has to make a decision on whether it should be compulsory.

Baroness Trumpington: My Lords, does the Minister recall that I asked a Question concerning the building of houses in an area where it is known that there is a water shortage? Will he tell me whether houses are continuing to be built, and is it true, as I have heard, that there is already a ban at this time of year on washing one's car with a hose because of shortage of water?

Lord Bach: My Lords, there has been a hosepipe ban in some parts of the south-east for some time, and it still exists. With extra housing the water position has been taken into consideration, and in their long-term plans the water companies are dealing with what they know is likely to happen in those areas.

Lord Livsey of Talgarth: My Lords, does the Minister agree that resource planning is inadequate in the context of climate change? It is an established fact that in many parts of the country, but particularly the south-east, sometimes only 40 per cent of the rain required falls. What has happened to plans for a national water grid to bring water from the north of England down to the south-east? Is it not time for long-term resource planning?

Lord Bach: My Lords, we are looking closely at whether there should be a national water grid. A great deal of water is already transferred within company boundaries, and there is some transfer between neighbouring companies, but we should not underrate the problems of a national water grid. Water is of course bulky and heavy and expensive to pump. It would need widespread excavations to build. We would have to be sure that it was a cost-effective solution, and we would also have to consider the environmental benefits. It is not an easy issue.

Baroness O'Cathain: My Lords, the Minister keeps talking about 25-year resource planning, but we are not actually in control of when it rains. Surely the answer, which the Government are skirting around the whole time, is compulsory metering. They do it for new house builds; why cannot they do it that way?

Lord Bach: My Lords, I know that there is strong feeling on both sides of the House about compulsory metering. We have heard it today. I have already given my answer. We encourage metering, but there are issues with it as well.

The Countess of Mar: My Lords, what proportion of water usage in the south-east can be attributed to the irrigation of crops? In view of global warming, what research is being done to encourage farmers to grow crops that are much more tolerant of dry conditions?

Lord Bach: My Lords, I cannot give the noble Countess the figure for the south-east that she asked for, but I shall write to her with it.

Viscount Simon: My Lords, on yesterday's BBC News, there was an item about water shortage that suggested that loos should not be flushed until absolutely necessary. Are there any plans to issue face masks?

Lord Bach: No, my Lords.

Lord Walpole: My Lords, perhaps I may cheer the Minister up a little by saying that the ground water that we discussed in my supplementary question last time has recovered and is up to the level at which it should be. So there is some good news.

Lord Bach: My Lords, I was reading that question this morning and noticed that I had no reply last time to the noble Lord's question about his bore hole. I am absolutely delighted to hear the news.

Lord Renton: My Lords, are we to assume that desalination and other purification of sea water is not considered as a solution to this great problem?

Lord Bach: My Lords, I am grateful to the noble Lord. Desalination is an important part of the solution to the problem. Sometimes, it is to be favoured over new reservoirs for environmental reasons and because it is less costly. Desalination plants are almost certainly one of the major ways to deal with the problem.

Passports: Personal Interviews

Lord Roberts of Llandudno: asked Her Majesty's Government:
	What access arrangements are being made to enable all passport applicants to attend obligatory personal interviews from the end of 2006.

Lord Goldsmith: My Lords, from the end of 2006 there will be a requirement not for all passport holders but, in the first instance, for all adult first-time applicants to attend for interview. A network of office locations for the interviews will be provided. It has been designed to strike the optimum balance between cost and ease of access. It will consist of 69 new offices, the locations of which can be announced when the current negotiations to provide them have been finalised. Different arrangements will be made for remote rural communities.

Lord Roberts of Llandudno: My Lords, I thank the Minister for his Answer. Many first-time applicants will be young people on a very limited income who will perhaps need to lose a day's work and incur considerable expense to get to a passport interview office. How will the Government assist them? Also, how much will the 69 new offices cost, and how much training will be given to the staff? What is the final total likely to be?

Lord Goldsmith: My Lords, I cannot answer the last part of the noble Lord's question. As I indicated in my Answer, it is important to finalise the negotiations on the new premises. However, the design process has been such as to balance the proper requirement to keep down the cost with keeping down the average distance for the vast majority of applicants. The figures that have been calculated demonstrate that the costs will not be significant because of the placement of the offices. The average cost of journeys will be in the very low pounds.

Viscount Bridgeman: My Lords, will the noble and learned Lord the Attorney-General tell the House what consideration was given to building on the Post Office's existing passport service before it was decided to seek private-sector support? I bear in mind the letter from the Communication Workers Union to Members of Parliament last month which referred to the,
	"consistently negative attitude from the Home Office towards the Post Office solution".

Lord Goldsmith: My Lords, I do not have a copy of that letter, but I can tell the noble Viscount the position on the use of post offices. The Post Office, having originally bid, withdrew its bid for the work. It is important to note that the introduction of the interviews will not take anything away from the Post Office. First, passport applications will not be lodged at the new offices. Secondly, it will be necessary to have particular arrangements for the interviews to take place. Someone in a post office queue, for example, should not have to answer personal questions to prove that he or she is the person they are supposed to be. You would also need people who are trained. Granting a passport to this country is a job done by civil servants.

Lord Dubs: My Lords, to avoid people having to lose a day's pay while attending the passport office, would it be possible for those offices to be open later in the evening and above all on Saturdays?

Lord Goldsmith: My Lords, I am sure that that is a sensible thing to look at, though I certainly cannot give a commitment that it will happen. I should make it clear that the location of the offices has been designed such that the average travelling time for all one-way journeys is 19 minutes. It need not be the sort of exercise that will cause someone to lose a day's pay at all.

Lord Marlesford: My Lords, will the noble and learned Lord reassure us that at the interviews the necessary biometrics will be taken from applicants, so that we ensure that in future there are no false passports? Modern technology makes false passports inexcusable.

Lord Goldsmith: My Lords, the Government agree absolutely with the thrust behind the noble Lord's question. We have to move towards biometric data, and we are already doing so with passports in which a chip will include that information. In the future, probably about 2009, we will move, as the European Union has agreed, to including fingerprint data as well.

Lord Roberts of Llandudno: My Lords, the Minister spoke of 19 minutes' travelling time. How would he advise someone living in Aberaeron or Aberystwyth to apply for a passport in person when the nearest passport offices are in Liverpool, which is 81 miles away, and Newport, another 81 miles away?

Lord Goldsmith: My Lords, in my original Answer I indicated that there would have to be particular arrangements for certain remote rural communities. There are not many people in that category, but a careful analysis has been done. Some of them are in north Wales. I am not sure whether they are in quite the place to which the noble Lord referred, but we can talk about that later. The arrangements are not yet settled, and work is going on. Consultation is taking place, including consultation with the Welsh Assembly and other agencies. The arrangements will be announced in due course.

Sudan: United Nations Peacekeeping

Baroness Northover: asked Her Majesty's Government:
	What is their response to the call by the Secretary-General of the United Nations for a United Nations peacekeeping operation in Sudan.

Lord Triesman: My Lords, the United Kingdom welcomes the African Union's recent agreement in principle that the AU's mission in Darfur, AMIS, should be handed over to the United Nations. We are urging the AU to take that decision as soon as possible to allow the UN to begin the necessary planning. AMIS has been a success in difficult circumstances. We will continue to support AMIS during the remainder of its mission and to do what we can to facilitate an early and successful handover to the United Nations.

Baroness Northover: My Lords, I thank the Minister for that reply and welcome the action by the Secretary-General to bring Sudan very much back on to the international agenda. Killings and rapes are continuing as we speak. What are the implications of the establishment of a UN peacekeeping operation for the African Union's role in peacekeeping? Will that continue? What will happen elsewhere on that? The involvement of the AU in such a way was a very welcome development, even though it was clearly insufficiently funded and insufficient in Sudan. Are the British Government contemplating any contribution to the UN peacekeeping force? If so, what form would that take?

Lord Triesman: My Lords, the African Union itself and its sub-regional rapid response military units are in a stage of good development. That is certainly true of western Africa and the SADC countries in the south, although not, for obvious reasons, the Horn of Africa. I do not think that the African Union feels that it has done less than it should or that it feels slighted that the United Nations will take on a greater role. As to the composition of United Nations troops in the event of a blue-hatted operation taking over, there has been no decision about that, including from the United Kingdom.

Lord Anderson of Swansea: My Lords, is the Minister confident that the United Nations has fully learnt the lessons of the tragedy of Rwanda in 1994? In any event, will not the major component of any UN force continue to come from the region? Is that not appropriate? What continuing form of assistance—technical, logistical and training—do we propose to give to the African Union?

Lord Triesman: My Lords, everybody has learnt from the tragic lessons of Rwanda. There is no doubt in my mind that the preparation of the African Union, at continental and regional level, has drawn on those lessons. I also share the view that a UN force is bound to have a significant contribution from Africa; I cannot imagine how it would work on any other basis. In all of these cases, the development of those forces will be assisted by logistics, training, good command and control and, indeed, the European Union trying to ensure that that is funded.

Lord Howell of Guildford: My Lords, is there a peace to keep in this situation, where there has been the most hideous bloodshed, which appears to be continuing? Secondly, could the Minister clarify the UN role in this? Mr Kofi Annan delivered a fine address here in London on Monday evening, which perhaps the Minister heard, in which he mentioned these points. Many people felt that the African Union itself already had a UN mandate, so that the proposal for a new UN force would presumably embrace some of the activities of the African Union. Are they completely separate operations? Has the African Union really decided to hand the whole thing over? I think that this needs clarifying, because many people, myself included, are very confused.

Lord Triesman: My Lords, I hope that I can assist with some of the confusion; I shall certainly try. The peace is very fragile and the position in western Sudan, in Darfur, has deteriorated even more so since the beginning of 2006. There has to be a solution, not just in peacekeeping on the ground but in the political negotiations in Abuja. That is vital. This will only be finally resolved by a political solution. The UN is playing a role in Abuja as, of course, is the African Union. I feel that AMIS, which was mandated by the African Union itself, was a mission that could be handed over, given its mandate, to the United Nations. I hope, from my experience of Sudan, that the mandate will be adapted slightly to ensure that United Nations forces, were they to be introduced, could pursue the objectives of peacekeeping more vigorously than the African Union has been able to.

Lord Avebury: My Lords, does the noble Lord think that the mandate should be extended to allow the UN force to pursue aggressively the elements of the militias that are still taking out villages and raping and killing civilians in the region? Furthermore, can the noble Lord say where the 20,000 troops needed for the mission are to come from, bearing in mind that we are now scouring Europe to provide enough troops for the ISAF 9 mission in Afghanistan? Is it possible that the African Union troops who are already there will form the core of the new UN force? If so, could they not be provided with the extra funds and logistics, the lack of which has hindered the effectiveness of their operation so far?

Lord Triesman: My Lords, it is too early to speculate about where the troops will come from, but I accept the proposition that anything that we can do to assist the African Union further to improve its operations—command and control, logistics, lines of supply and so forth—needs to be done now. In any event, there will be a period during which the union continues to be the key force. That, I think, is how we have to look at it.
	On the question of the mandate, many argue from the justifiable position that the mandate currently in place could be far more fully exploited and to beneficial effect. I have just observed that it could probably benefit from some further modification. I would be happy if I could tell the House that the current mandate was being fully utilised, because it certainly permits the pursuit of those who are involved in making active and aggressive attacks on civilians.

Lord Hylton: My Lords, will the Government seek to establish a no-fly zone over Darfur? Could that not be quite easily enforced from existing airfields in Chad using a small number of aircraft?

Lord Triesman: My Lords, the Government of Sudan by agreement are not deploying their Antonov bombers any longer. There are helicopter movements, broadly speaking because there are no roads and that is the only way in which troops can be moved around at all. We are trying to encourage the Government of Sudan to move their own troops to stop the Janjaweed militias going around and murdering people as well. A delicate balance needs to be struck. However, at the moment it would be difficult to suggest that anyone could seriously or securely use Chad. The present aim is to ensure that further conflict does not break out in Chad and then spill across all her neighbouring borders.

Baroness Tonge: My Lords, can I inject a sense of urgency into this? The terrible suffering of the people of Darfur has gone on for almost two years, while the international community has dithered about what to do. How long will it take to set up a UN force, if it is agreed, and what will happen to the people of Darfur in the mean time?

Lord Triesman: My Lords, I accept that the international response has not produced the outcome for the people of Darfur that we all wish to see, but it is not right to say that there is no sense of urgency or that too little has been done in many respects. This is the first major African Union exercise of its kind. It is a great credit to the union, particularly in the establishment, for example, of viable policing in areas where there are displaced people. Some real successes have been gained. However, I accept that those successes are not adequate, and it is consideration of the problems that leads to the conclusion that the United Nations has to take a more direct role, along with the African Union's acceptance of that conclusion.

Business of the House: Debates Today

Lord Grocott: My Lords, on behalf of my noble friend the Lord President of the Council, I beg to move the Motion standing in her name on the Order Paper.
	Moved, That the debates on the Motions in the names of the Baroness Miller of Chilthorne Domer and the Lord Wallace of Saltaire set down for today shall each be limited to two and a half hours.—(Lord Grocott.)

On Question, Motion agreed to.

Immigration, Asylum and Nationality Bill

Lord Grocott: My Lords, on behalf of my noble and learned friend the Secretary of State for Constitutional Affairs and Lord Chancellor, I beg to move the Motion standing in his name on the Order Paper.
	Moved, That the amendments for the Report stage be marshalled and considered in the following order:
	Clauses 1 to 14
	Schedule 1
	Clauses 15 to 50
	Schedule 2
	Clauses 51 to 58
	Schedule 3
	Clauses 59 to 61.—(Lord Grocott.)

On Question, Motion agreed to.

Rural Economy

Baroness Miller of Chilthorne Domer: rose to call attention to the state of the rural economy; and to move for Papers.
	My Lords, the rural economy is facing a time of tremendous change following the implementation of CAP reform. Like any period of change, it offers threats and opportunities. But I believe that the opportunities are greatest for the country as a whole, while the threats are greatest for those who live and work in rural areas. The opportunities offered by CAP reform—and Members on the Liberal Democrat Benches believe that there are tremendous opportunities—must be taken up.
	I tabled the debate in a spirit of optimism because of the new opportunities offered by CAP reform. However, since then it has emerged that funding for the rural development pillar of the CAP may have been slashed as part of the EU budget deal struck in the dying days of the UK presidency, so I hope that this debate will provide an opportunity to explore whether the rural areas of England will end up bearing the full brunt of the deal—and that depends on a Treasury decision on whether it will co-finance the rural development pillar of the CAP properly.
	The debate will offer three things. It will offer the chance for the Minister to tell us exactly what the figures are, because I believe rumours are unhealthy, spreading uncertainty and fear, especially among the rural community. There are some pretty wild figures out there—40 per cent, going down as low as 18 per cent. I hope that today the Minister will be able to give some certainty to what, inevitably, looks a pretty grim picture for rural areas.
	Secondly, the debate will offer a chance to look at ways that the Government could make good that shortfall and how they could finance that, whether through co-financing or modulation of Pillar 1.
	Thirdly, and perhaps most importantly, the debate will offer an opportunity for the Members of your Lordships' House to say why the Treasury should be investing in rural areas. I believe that investment in rural areas pays dividends, not only for the rural areas themselves but for the nation as a whole. Given the noble Lords who will be speaking, and the depth of your Lordships' experience of many aspects of rural life, across a wide range of issues, I believe that we will be able to make an excellent case.
	I would like to look briefly at the picture from the point of view of those trying to make a living in rural areas—those who live and work in such areas. Socially, of course, there is no reason why just because you were born in one place in England your chances of a decent wage or an affordable home should be so much poorer. In fact, however, that is what the statistics show.
	In 2005 the average weekly household income for people in urban areas was £367, but for rural areas it was £318; that is, £60 less. We have heard many times in your Lordships' House that rural housing is already unaffordable and getting more so by the day, with very little provision. Just to put some figures on that, one-third of rural residents spend over half their income on mortgage payments. That figure is around a quarter for urban dwellers. There is also, of course, the whole question of the provision of rural housing. So, those that live in rural areas are earning less and spending more. I am sure we will have to consider that they spend more on rural transport, for example.
	For the substantial part of my speech, I move to the rural economy and will look at what it produces for us as a nation, particularly against the issue of climate change, which has sharpened our awareness of the need to conserve and invest in our natural resources. Indeed, at Question Time, that very question came up about water.
	Rural areas are the reservoir of our natural resources. When I say "natural resources", that could mean water, which we discussed earlier, wildlife, land management to prevent urban flooding when we have too much water, energy crops, all sorts of renewable energy and, of course, food.
	My noble friend Lord Livsey will speak on food production, which is and must remain of prime importance. But we cannot take that for granted because for the food that we can easily grow here, the trade gap is, according to Defra's own figures, growing. We are exporting less of that food and importing far more. The trade gap in food that we can grow in this country—I am talking of beef and dairy products, vegetables and wheat—is now £11 billion. Why are we importing so much of something we can grow ourselves? What has happened to the effort to reduce food miles and Defra's "buy local" policy? Food from Britain received £8 million in grants from Defra last year. Where is that money is going?
	I could spend all my time on the subject of food—it is very close to my heart—but I want to move other areas of the economy. To begin with, I would like to divide the areas up into different areas of capital. I will start with environmental capital. It is a plus for the countryside that it is rich in such capital; the quality of the landscape and biodiversity of rural areas are among their biggest assets. That shows in purely financial terms: the tourist industry is worth over £12 billion, with at least 380,000 jobs. Visitors are coming to Britain to look at our incredibly wonderful landscapes: either at the jewels of that landscape, such as national parks, areas of outstanding natural beauty or our coastline; or at the run-of-the-mill—if you could call them that—little villages and bluebell woods; all the things that might seem clichés when you see them on a calendar, but which are wonderful assets. I believe the Government have done a good job in giving people the facility to explore more of those assets through outside recreation. There is another benefit, too, in terms of health. Investment in our footpaths, open access areas, coasts and hills pays off twice: once through tourism, and once through improving the health of our nation.
	The second area of capital is economic capital; that is, such things as transport, communications, IT connections and work space. That area of capital is in very poor condition. I am sure my noble friend Lord Bradshaw will tell us about rail connections again being under threat from the Government. The broadband IT infrastructure is still in a dire state in rural areas, with only 1,116 out of the 5,500 exchanges offering broadband services. Banks have closed at a phenomenal rate: 4,000 so far, with many more to follow. I am sure noble Lords will touch on post offices. Digital TV and radio are still mainly unavailable in rural areas, as I found out to my cost when I bought my husband a digital radio for Christmas; there is no digital reception in north Devon. There is a direct correlation between poor economic infrastructure and poor economic performance, which the Government must address through rural development. Rural areas cannot help themselves if the sort of infrastructure that should be provided is simply not there.
	Thirdly, there is cultural capital, and I am relieved that the noble Baroness, Lady McIntosh, will speak on this. She is so well qualified, and I am not. The fourth sort of capital is social capital, which includes people's networks, their communities and their extended families. Historically, this has probably been one of the greatest strengths of rural areas. There is a lot of truth in the cosy picture of village life, where everyone knows each other, and three generations of the same family live around the corner from each other in a very small area of rural Britain. However, that is changing, partly because of the lack of affordable housing. The costs of providing services once provided by social networks are much higher in rural areas because of the greater distances and the lack of economies of scale. According to the National Council of Voluntary Organisations, there is a particular problem caused by sparsity and distance, which create challenges. Will the new Social and Community Programme aim to give full cost recovery to the voluntary sector and enable it to continue doing its job effectively?
	Of the different sorts of capital, I want finally to mention human capital. That includes education, skills, health and entrepreneurship. Many of the rural economies are low-wage economies, where workers have seasonal and low-paid jobs. One of the things that has been discovered to hamper such economies from becoming higher-wage is a lack of educational skills. Schools in rural areas are still facing problems with teacher recruitment. Children find it harder to take part in after school activities due to transport difficulties. However, the Government's agenda for schools in rural areas is not helping. Paragraph 97 of the Select Committee report on the education White Paper trenchantly makes the point that real choice in schools is no choice when there is only one school within reasonable travelling distance—that is the case with almost all schools in rural areas.
	My noble friend Lady Maddock will touch on many of the difficulties of living in very remote rural areas. I am extremely pleased that she will do so. The peripheral areas with the greatest sparsity problems have multiple problems. I was going to say that they lack all five sorts of capital that I mentioned, but they still have wonderful landscapes, so they lack four sorts of capital. However, you cannot eat the view, as I think somebody once said. All those areas need capital investment—that is what rural development is. Everyone expects investment to pay dividends and I am sure that the Treasury is no different, but I hope that our debate will show that rural areas repay investment. We must get the Treasury to look at those facts.
	On 6 June last year the noble Lord, Lord Whitty, who used to occupy the position that the present Minister—the noble Lord, Lord Bach—now occupies, said:
	"We have also managed to enhance the European budget for rural development, perhaps by not as much as we would have liked, but it is still a significant benefit".—[Official Report, 6/6/05; col. 707.]
	I must ask the Minister now, is that position different? My Lords, I beg to move for Papers.

Baroness McIntosh of Hudnall: My Lords, I am very pleased to be the first to congratulate the noble Baroness, Lady Miller of Chilthorne Domer, on introducing this timely debate. Her experience and knowledge of rural matters is widely respected in this House. She has attracted a list of speakers who all have similar credentials. I cannot represent myself as any kind of expert but I want to make a few brief observations based on my own experience.
	I was brought up in a village in rural Hertfordshire, and I live now in a village in rural Essex. Both are settlements that have remained recognisably the same over many generations, while also undergoing profound changes. Both are quite close to London, which, in economic terms, is both a blessing and a curse. What they have in common, which has allowed them to retain their distinctive characteristics, are, among other things, the following: first, a diverse population within which there is a proper balance of young and old, and a high proportion of people who are economically active. Secondly, as a consequence of that there is a thriving primary school with a growing intake. Thirdly, there is a significant number of small businesses providing reliable services to the locality.
	I hope that your Lordships will indulge me if I give an example of that by citing the fact that my daughter is about to get married in the village where I live. We have been able to source from within the village just about everything that we need to make this quite big event—in my life, anyway—happen. We have the flowers, the catering and the cars. We even have a craftsman carpenter who has been commissioned to make one of the wedding presents. I think that is pretty good. On top of that, a great deal of accommodation is available in the village, which will allow many of the guests to stay there. All of that is generating income for the community. I cannot say that my daughter's wedding is the biggest event that will ever happen in rural north Essex but it is not insignificant. The essential element is that services are available in the locality which can be drawn upon so that the money stays in the locality.
	Fourthly, there should be a variety of social activities, for instance drama, music and sport, and places in which they can take place such as a church, a village hall or, as in my village's case, several pubs. Finally, there should be enough local shops to provide for most daily needs within the community itself.
	All those things happen to be available in the rural community that I am part of, but I know that my village is no longer typical. It is harder and harder for such communities to retain their distinctiveness and viability, and even where there is considerable affluence, as there is in my area, house price inflation has made it extremely difficult for young people to stay where they were born and grew up, which threatens to undermine the broad demographic so crucial to a dynamic community. The growth of large out-of-town supermarkets has hastened the decline of local shops, and rural post offices are struggling to survive. While I accept that it is not possible to resist the forces of change—nor always desirable to try—it is worth putting some energy into supporting the social and economic micro-climates that healthy rural communities generate.
	What will it take to keep rural communities dynamic and allow them to retain or regain their vitality? There are many answers to this, and no doubt we shall hear most of them. I suggest three things, all of which have already been touched upon by the noble Baroness, Lady Miller. The first of those is affordable housing. The Government have plans to increase the availability of housing in the south-east, and we know that large-scale development is planned, for instance, in the Thames Gateway and along the M11 corridor. While I do not view these changes with huge enthusiasm, there is a need to be met and this is one way of meeting it. Yet, smaller, more incremental development within existing communities is also hugely important if small towns and villages are to be sustainable. Making it possible for young, economically active people, particularly those with young children, to live in rural areas depends among other things on housing being available, but those same people often choose to live in such areas because of their special character, which can be quickly distorted by unsympathetic or excessive expansion. What do the Government plan to do to support the provision of small-scale housing development in rural areas?
	My second point concerns transport. In my area, the transport infrastructure is not too bad. There are rail services, though they are under pressure, and a good network of interconnected buses. This is not true everywhere, as the noble Baroness, Lady Miller, has already pointed out. We have learnt just this week that further review of the rail network is being undertaken. It seems almost inevitable that if the axe is to fall anywhere it will be on rural lines. Healthy, diverse communities have diverse transport needs. What do the Government plan to do to monitor pressure on the rural economy created by reduction in public transport, and to make resources available to keep services going?
	Finally, on arts and culture, in November last year Arts Council England published Arts in Rural England, outlining the results of its review of arts provision in rural areas. The report notes that the arts are contributing significantly to regeneration in small towns and villages. It points to the importance of arts activities in increasing tourism in many rural areas—I think, for example, of the Yorkshire Sculpture Park and the development of the Maltings at Snape in East Anglia—and to the rise of new creative businesses where agricultural land or buildings have become redundant. It cites the example of Middle Rocombe in Devon where a dairy farm becomes an art farm each September, allowing up to 50 artists to show their work. In 2003, the event attracted over 3,200 visitors and produced sales of £13,000. There is also a growing network of small arts festivals across the UK.
	It seems clear that communities which have managed to sustain, often against the odds, both amateur and professional arts activities derive both social and economic benefits, including making themselves attractive to visitors who spend money and to potential residents, especially families, who are more likely to be drawn to areas where there is a strong cultural life. In the village where I live, one of the most heartening events of the year is the annual gathering of morris dancers—please do not laugh. They come from all over the UK, including the City of Westminster, to participate in a weekend of dancing in the streets. Morris dancing is often held up as exactly the sort of symbol of rural life that we do not want to get stuck with, being a bit weird and distinctly comic. I can assure your Lordships that when the police close the streets on the first Saturday in June in Thaxted, a dozen teams of morris men strut their stuff outside my window and there are many hundreds, of all ages, watching and cheering them on. They are all spending money.
	Participation in arts activity, whether as audience or artist, gets creative energy running in a community. Yet it is hard to keep it going, particularly as the costs of maintaining venues in which activities can take place are mounting.
	There is some evidence that the business of applying for licences under the Licensing Act 2003 has become a problem for rural communities. The costs can be very difficult to meet, and the application process is complicated. Will my noble friend impress on his colleagues at the DCMS the importance of monitoring the impact of the Licensing Act 2003 on rural communities and of reviewing it if necessary?
	I live a particularly privileged kind of rural life—apart from the aeroplanes, but I promised myself that I would not go on about them today, and I will not—in a part of England that is both beautiful and affluent. I know that is far from the whole story; there is acute poverty and deprivation in some rural communities where the loss of traditional employment, allied to the lack of effective infrastructure, has been devastating. England still has strong rural cultures, and those cultures can be helped to develop their economic muscle to the benefit of everyone, as the noble Baroness, Lady Miller, has already indicated. I hope that the Government will continue energetically to develop their policies in support of this important aspect of our national life.

Lord Brooke of Sutton Mandeville: My Lords, this is not the first time that I have followed the noble Baroness, Lady McIntosh of Hudnall, yet it is as much a pleasure today as it was previously. Hers was a model contribution to the debate on today's subject, for which we congratulate and thank the noble Baroness, Lady Miller of Chilthorne Domer. Seven- or eight-minute speeches make for cameos and telegraphic ones at that. I have lived part of my life in rural Wiltshire for the past 30 years; 18 years north of Salisbury Plain and 12 years south of it. The saying "chalk and cheese" comes from Wiltshire, and the plain is a cordon sanitaire in terms of pace of life, but the valley in which we live is not a bad microcosm from which to extrapolate. In one of AG Street's Wiltshire books, he takes the villages of Sutton Mandeville and Teffont Evias and turns them into Sutton Evias and Teffont Mandeville, as being typical of the villages around us.
	The established Church in Wiltshire is more given to team ministries than most other dioceses, and last Sunday we finally became one, after negotiations worthy of Barchester, at least from where our valley river rises as far as Salisbury's outskirts, where Wilton was the ancient capital of Wessex. Tisbury church, which gets into Simon Jenkins's book in the junior grade, is the cathedral of the valley, and Tisbury is the largest and equidistant village in the 25 miles between Salisbury and Shaftesbury. Its origins are mediaeval, but it has a well served railway station and at least 20 shops for a population of 2,000, apart from the radial outlying villages.
	In the days when I used to sit annually at the feet of the futurologist, the late Herman Kahn of the Hudson Institute, I also used to read Norman Macrae, the deputy editor of the Economist, which released him for a six-month sabbatical every five years to go round the world to find out how it was likely to change. One of his earlier forecasts was the growth of one-person or two-person businesses working from home, inspired by the new opportunities that technology would offer. We have one such, some 100 yards from our cottage, where a husband and wife team do automotive engineering design for clients around the world from their home in the hamlet's former chapel. Rural areas spawn such units more prevalently than urban ones, with a higher number per capita than in towns and cities. In our case, the normal rural deficit of IT literacy is counterbalanced by a website specialist a village away, though, as the noble Baroness, Lady Miller, said, broadband facilities are dramatically less available. Only 7 per cent of rural villages and 1 per cent of remote rural areas have access to affordable Internet connections, compared with 95 per cent of the urban population.
	Not everything in the garden is lovely. Historically, rural poverty has been assuaged by personal vegetable plots. It will be interesting to see how far that survives the relative disappearance of the agricultural labourer, one of whom lives next door to us. CAMRA says that there are fewer pubs now in rural areas than during the Norman Conquest. At least two such pubs have become private houses in our valley in the past decade. That is also an index, as the noble Baroness, Lady Miller, said, of the crisis in affordable housing.
	The growth in rural homelessness since 1997 has been three times that in urban areas. Government emphasis on the quality of life in the countryside in part masks a lower standard of living. Rural Britain has the highest proportion of working-age adults receiving in-work tax credits. The Social Exclusion Unit is still without a section specifically dealing with rural poverty. The paucity of accessible citizens advice bureaux makes rural tax credit clients more reliant on helplines, and, as emerged from a supplementary answer to a Starred Question and subsequent ministerial correspondence last year, the Revenue helpline is not universally reliable.
	It all comes down to the reduced effect of the sparsity criteria in the past decade under the standard spending assessment rules per capita, and it looks like it will get worse. Our admirable local GP envisages that the NHS will reduce local facilities over the coming decade, so the under-resourced transport facilities will be under further pressure. Of the increased funding of the national transport budget, less than 0.02 per cent will go towards the rural transport fund for the extension of rural bus services.
	When Lloyds TSB closed its branch in Tisbury, the announcement on the door implied that there would be a warm welcome in Wilton, nine miles away, for its former customers. One of the valley's local post offices, which are candidates to inherit financial services opportunities, has just won the Post Office's prize for the best post office in the region, but there is a continuing threat of post office closures. Council tax problems threaten the closure of Tisbury sports centre, and the resolution of those problems will still see cuts to the arts budget.
	These modest observations are not the utterances of a pessimist or a cavalier caviller, but those of a realist. Potentially, rural areas have ground for optimism in their capacity for community spirit. In our valley, the eventual creation of the team ministry last weekend is itself a beacon, not just for Christian reasons, but for that sense of community for which the Church at its best stands.
	Within the past 18 months, in the debate on an Unstarred Question on church buildings asked by the noble Lord, Lord Harrison, who happily is in his place, I described how Sutton Mandeville, our eponymous village, was raising £65,000 over three years to restore a mediaeval church tower in a parish of fewer than 100 souls. Your Lordships' House would not normally expect an update on so microcosmic an event, but we raised £54,000 in the first two years entirely by our own efforts, without institutional aid, and so have a relatively soft landing for the final year. The significant victory has been that this was the work of the whole valley and not just of the village. Two of your Lordships' House have generously given lectures to packed audiences within the church. In seven weeks' time we shall have an Ashes celebration cricket dinner with an ex-president of the MCC as speaker.
	Self-help is not dead and the spirit that the valley engenders is redolent of Burke's small platoons. I do not want to rub salt in the wound of the defeat of the Government's referendum for regional government in the north-east, but opportunities for rural areas lie best on a local, not a wider, basis that is almost contradictory to local chances.

Lord Cameron of Dillington: My Lords, first, I declare an interest as a farmer, a landowner, a rural businessman and as chair of Somerset Strategic Partnership. Secondly, I thank the noble Baroness, Lady Miller, for introducing this debate.
	The rural economy is a large canvas and I shall touch first on a narrow area, and then a wider one. The narrow area concerns Wheels to Work schemes. For those that do not know, they deal with a particular rural problem of getting young people to work. They have no transport to get to a job, and they have no job to earn the money to buy themselves the transport—a Catch-22 situation. The simple answer is to lend them a moped for free until they have been in work for six months and can afford to get their own set of wheels. The numerous pilots have shown that after taking part in the scheme, they buy themselves transport and thus launch themselves on to a lifetime of earning, tax paying and independence.
	My point is that the cost of Wheels to Work schemes is about half the cost to the taxpayer of the jobseeker's allowance and the other benefits that those youngsters can receive by remaining out of work. In other words, if the DWP were to sponsor nationwide Wheels to Work schemes, it would instantly save money within its own department and, of course, for the taxpayer. But no—the DWP leaves the decision-making process to its regional Jobcentre Plus managers, who inevitably see a cost on their budget rather than a saving to the taxpayer. So, many of the pilot Wheels to Work schemes are ending while others struggle on—raising funds through coffee mornings and the like—whereas what should be happening is for the scheme to be universally available in England and Wales. I get quite cross about such a waste of taxpayers' money, not to mention the waste of young rural lives. I happen to know that Defra also gets quite cross about that. Maybe the Treasury should be told, as Private Eye would say. Enough said; I have got that off my chest.
	My second point refers to planning in the context of sustainable development. Everyone knows that one requirement for a sustainable countryside is to have profitable and diverse businesses supporting it. Everyone also knows that agriculture is no longer the backbone of the rural economy; it now represents less than 5 per cent of rural gross value added, whereas services and manufacturing enterprises represent over 90 per cent.
	There are good reasons for supporting such non-agricultural enterprises. First, since over 25 per cent of all VAT-able UK businesses are in rural areas, what is good for rural must be good for UK plc. Secondly, growth in the wider rural economy is the best way to tackle the real deprivation that exists in rural England. Thirdly, prosperous businesses are also vital in conserving and enhancing the fabric of our countryside for the benefit of all—locally and nationally, now and in future.
	Therefore, planners at all levels must understand the huge benefits of having diverse rural businesses. Every community should have its non-agricultural workspace. Maybe every home should be allowed to have a small business operating from it, as the noble Lord, Lord Brooke, was saying. In fact, recent research by the Countryside Agency called Under the Radar showed that rural dwellings are already home to nearly 700,000 businesses, which are largely ignored by business support services.
	Equally, we must all understand that our countryside is part of the capital of life for us and for our children. Furthermore, since our debate is on the economy, if we spoil the attractions of our countryside we actually destroy our economic future. For instance, the countryside hosts a £15 billion per annum rural tourist industry. It is also a magnet for incoming businesses; 66 per cent of all new countryside businesses are started by newcomers. They move there and then start a business, so we destroy the beauty of our countryside at our peril.
	However, my point here is that with the changes happening in the countryside, we need to change our approach. Having merely a locally reactive approach to planning, based on guidelines from the centre, is not enough. Neither will merely controlling development sustain our countryside. Regional and local planners must assist diversification more actively. For instance, local planners should get together with their own enterprise departments—and with other bodies, maybe neighbouring planning authorities or under the county council umbrella—to encourage and help businesses which want to start up, move to or expand within their boundaries.
	There are still far too few regional and local rural action plans, or economic strategies, which reflect the reality of rural business. The reality of potentially healthy rural economies is swamped by too much attention to the weaker parts. Dare I mention farming, which I involve myself in, or even tourism in that context? In this way, the real economic potential tends to be ignored by urban-led policies. There are, for example, more manufacturing businesses per head in the countryside than in towns. RDAs running their dreadful "city region" policies need to recognise that "rural" means more than a pleasant landscape attracting a few tourists. Rural enterprise is stronger than urban enterprise, and RDAs need to help it.
	A vibrant countryside needs jobs. Every level of government, from parish council upwards, needs to be bold and innovative in attracting new businesses. We need to plan the workspace, not just leave it to chance or the vagaries of the land market. We need to be bold and innovative in promoting the adaptive reuse of buildings, including farm buildings. We should seek high-tech, high-value enterprises.
	Our rural economy has changed dramatically in recent years, with the decline of agriculture and the advent of broadband being two major factors. It is vital that we adapt our planning systems and the input of local government to positively promote a sustainable future for us all. Development control is important. At all costs, we must not damage what I call our "countryside capital". A little bit more thinking and real planning about how we are to sustain our countryside over the next 10 to 15 years, however, is an absolute must.

Baroness Prosser: My Lords, I join others in thanking the noble Baroness, Lady Miller of Chilthorne Domer, for initiating this debate. I am an urban person. I have never lived in the countryside, but developed a love for it many years ago in my days as a Girl Guide, when we used to annually go camping in what I thought of then as the far-flung reaches of the Sussex Downs. I have spent many happy and enjoyable hours since then walking and rambling and, when I was a little younger, even mountaineering.
	Such activities, while healthy and enjoyable, can lead to a rather romantic view of rural life. We do not note the isolation of many rural dwellers, often brought about by the paucity of public transport which, in turn, makes it difficult to access health and education services, and constrains employment choices. The impact of the second-home culture on rural property prices particularly hits the younger generation, who are needed to remain and regenerate declining populations but are often forced out of their own environments in order to find somewhere affordable to live.
	We are all familiar with these issues; they have already been mentioned this morning. I shall concentrate, however, on two aspects of the rural world of work. I declare an interest as a member of the Transport and General Workers' Union, which is in the forefront of representation for rural and agricultural workers. First, I was pleased by the Government's sensible decision to maintain and support the Agricultural Wages Board structure and its protective mechanisms. There were some who said, when the national minimum wage was introduced, that the AWB was no longer necessary. However, the Agricultural Wages Board recognises careers paths and skills acquisition, and covers more than rates of pay. The availability of a statutory framework is valued in particular by employees in small farms or workplaces, where day-to-day relationships are key to survival and questions of personal pay can be tricky.
	Secondly—and I shall listen carefully to the Minister's reply on this—there was much rejoicing, not only among rural workers and their representatives but from employers who play by the rules, supermarkets who did not want to be seen to gain from the abject exploitation of vulnerable workers and from the National Farmers' Union, when the Gangmasters (Licensing) Act 2004 was passed. The Morecambe Bay tragedy was the most vivid example of what can happen when greedy, ruthless characters prey upon the weaknesses, lack of knowledge and lack of rights of those who are desperate for work and money. Too many other examples exist of underpayment of wages, illegal employment of children, bonded and forced labour, illegal employment of foreign workers and breaches of the law on hours worked. Each one of those misdemeanours by exploitative, uncaring gangmasters represents a story of human misery and often of fear.
	The Act is a good thing, introduced with cross-party support. Arising from the Act will be the establishment of a Gangmasters Licensing Authority, a non-departmental public body made up of key industry stakeholders and enforcement agency representatives. Part of its responsibility will be to enforce the licence conditions. What has not yet been decided are the sectors of the food and agricultural industries to be covered under the Act. There is a view in some government departments that so-called secondary processing should be excluded from coverage. If this view prevails, areas such as the sorting, cutting and packing of meat, vegetables and fruit will be excluded from the requirements to operate under licence and could be left open to the very exploitation which the Act is designed to eliminate.
	An audit was recently conducted by the Temporary Labour Working Group—a body made up of unions and businesses with a direct interest in this sector—of gangmasters supplying casual labour to the food and farming industry. Two hundred gangmasters voluntarily participated and the 164 reports so far completed show a whacking 90 per cent of them were operating outside the law, including one example of a 14-year old child driving a fork-lift truck. These, I point out again, were gangmasters who volunteered to be involved, so presumably thought they had nothing much to worry about. If that is the case in what we might call the better end of the market, what is happening with those gangmasters who are not prepared to be open to scrutiny?
	These are the very areas of employment which the Act was designed to protect. These are the vulnerable people—the migrant labourers or simply the indigenous rural workers with few choices in the world of work—who need the cover of legislation, inspection and enforcement to prevent them suffering at the hands of rogue employers.
	I ask the noble Lord, Lord Bach, to give serious consideration to my comments so that the full intentions of this legislation can be realised.

Earl Peel: My Lords, I thank the noble Baroness, Lady Miller, for introducing the debate and I declare an interest as an owner of land in the north of England.
	My remarks today were largely triggered, curiously enough perhaps, by a letter written by the Minister to my noble friend Lady Byford in response to questions raised in the proceedings on the Natural Environment and Rural Communities Bill. Under the paragraph in the noble Lord's letter referring to the funding of the new agency Natural England and its various responsibilities to deliver agri-environment schemes, the Minister made clear the Government's intentions to siphon off money from Pillar 1 to Pillar 2 through the process known as modulation. There is nothing new in that. We have known that that was going to happen and indeed is happening. What caught my eye particularly was the use of the words "Pillar 1 subsidies". I appreciate that some 20 per cent or so of Pillar 1 funding is still inextricably tied to agricultural production and export subsidies, but the remaining 80 per cent or so is now in the form of the single farm payment, which is open to all farmers subject of course to certain environmental and animal welfare conditions—a process known as cross-compliance.
	My question to the Minister will not come as a surprise to the noble Lords, Lord Cameron and Lord Lewis, because they sit with me on Sub-Committee D and have heard me raise this before. Did he mean to use the word subsidy and does he acknowledge, as I do, that the single farm payment is in fact a payment to farmers in return for complying with the new environmental and animal welfare conditions? It is worth recalling that the architect of the common agricultural policy reform, Franz Fischler, made it quite clear that it would be unjust for EU farmers to be economically disadvantaged in trade because of those new responsibilities.
	Subsidy has become a dirty word, a word that conjures up all the distortions of the past. It is important that it is used only in its correct context. I seek from the Minister a qualification as to whether Pillar 1 payments are in his view a subsidy or a payment in return for the delivery of certain environmental goods. We have known for some time that Pillar 1 payments will be cut through modulation between now and 2012, but no one seems to know by how much, which is extremely unsettling for those involved in farming, who are looking for stability above all. It is also clear that the level of funding under the rural development regulations will be reduced. We have heard some pretty alarming figures.
	Furthermore, it has not been determined how those reduced funds are to be distributed among the member states. Everything seems to be up for grabs at the moment. It is important that the Government fight the UK corner, on the grounds not simply of historical payments but of need—my goodness, there is plenty of that around, especially in disadvantaged areas in my part of the world. It has become increasingly clear that because of the Government's lack of confidence in securing a healthy settlement, they have committed themselves to the maximum modulation rate to help to fund their rural development projects from the single farm payment. That is another way of robbing Peter to pay Paul.
	I simply ask the Minister—although it is not a simple question, as he will understand—two specific questions. Will the 20 per cent modulation rate to which the Government have committed themselves be subject to matched funding by the Treasury, as under the rules—and, if not, why not? Secondly, is the Minister satisfied that the Government are likely to have sufficient funds to meet their obligations under the rural development programme—and, if not, where are the cuts likely to be made?
	As has been said, the European agriculture industry—for want of a better term—has been going through what is probably its biggest revolution since the war. Huge changes are taking place. Some will adapt, some will not. These are difficult times. The people of this country want from our countryside, from our farmers and land managers, safe, traceable food and a countryside of which we can all be proud. But that begs the inevitable question: what is the point of imposing all those conditions and restrictions on our producers if they are undermined by imported goods produced under conditions far short of the standards by which our producers must abide? That presents a real problem, but it is a top priority to be addressed. I would be interested to know whether the Minister shares my concern and, if so, what the Government can actually do about that. What mechanisms are in place to prevent those activities?
	Returning once again to the payments that our farmers and land managers receive for environmental delivery, it is worth reminding ourselves that if we want a countryside that is well cared for, coupled with a rich array of wildlife, it must be paid for; it does not simply happen. The truth is that there is no real competitive market in environmental management and wildlife conservation, except in special circumstances. Access is largely free at the point of delivery in exactly the same way as is the National Health Service. Green tourism, which is part of our modern culture, comes at a price. That will inevitably fall on the public purse if we are to ensure that the infrastructure of an attractive countryside is to be maintained and managed. Inevitably, that role will fall on those who own, farm and manage our landscapes.
	It is also important that taxpayers are provided with good value for money. There is no point in throwing large sums of money at conservation schemes if they do not deliver. Far too often, too little scrutiny is applied to the success or otherwise of these agri-environment schemes and habitat restoration projects. A habitat that is restored does not necessarily imply that the associated species will automatically appear. Specific management requirements are often called for and too often discounted.
	The countryside is changing. Tourism is now the leading industry—as the noble Lord, Lord Cameron, has pointed out—and new businesses are emerging. These are vibrant times. Yes, there are great challenges—there is climate change, and there is rural housing, to name but two—but the backdrop to all this is the landscape itself and the way in which it is cared for. I have said it before, and I will say it again: it is largely the farmers and land managers who have the responsibility to deliver the aspirations of the majority, and we must all acknowledge and rise to that challenge.

Lord Livsey of Talgarth: My Lords, it is a great privilege to speak in this debate today on the rural economy, a debate that was initiated by my noble friend Lady Miller of Chilthorne Domer. We have already heard some excellent contributions, including one from the noble Lord, Lord Cameron. I was very interested in the remarks of the noble Baroness, Lady Prosser, about the social welfare of people in the countryside. I wholly agree with much of what the noble Earl, Lord Peel, has said about the single farm payment and about the production of public goods, for which, after all, the environmental payments are made for the benefit of the whole population. Our fear is how that will be financed.
	Rural life varies between agriculture, added value to primary produce, farm diversification, contracting, farmers' markets, co-operation, countryside pursuits and environmental initiatives. These days, those are all underwritten mainly in the private sector by adequate access to IT, market towns with viable businesses, small businesses, adequate transport, and affordable housing, which has already been mentioned. In the public services, in particular, they are underwritten by primary and further education, and by vital rural services such as GP services, community hospitals, the education provided in play schools, care for the elderly, keeping pubs and post offices open, and a viable police force, which is under threat from amalgamation proposals.
	That is a very wide canvas and, to be successful, a rural economy has to succeed in many combinations of these facets of rural life. Demography often plays a vital part because it is often skewed in rural areas to the elderly, and young people have left the countryside. It is often a case of whether enough money is circulating in the rural economy, whether businesses and local services are successful, and whether the local authority helps or hinders. Does the local authority have a good economic policy, for example? Are planning policies sympathetic to the development of rural areas, and does the rural development authority assist with progress policies itself? Is the local supermarket so big that it removes cash from the local authority, takes it straight along the motorway to the metropolitan areas and we never see it again?
	We all know that the downward pressure on the primary producer—the farmer—is best illustrated by the depression in milk prices from, for example, the supermarkets. The farm gate milk price has gone down by 30 per cent in the past 10 years. Yet the supermarket margins have risen from 1.3 pence per litre to 13 pence per litre in the same period; there has simply been a transfer within the milk market from one to the other. The Milk Development Council says that 1,500 dairy farmers leave the industry every year. Even the Rural Affairs Minister in the Commons, Jim Knight, accepts that. He says that farm gate prices,
	"are too low for many to be able to sustain their businesses".—[Official Report, Commons, 9/11/05; col. 132WH.]
	I would add that in many cases product is being sold at less than the price of production.
	The situation is obviously different in different sectors, but cereals are still being marketed at exactly the same price per tonne as we were using when I lectured students 20 years ago. The Government must act and get fair play into the market place. We strongly propose there being someone at the OFT who is responsible for policing the practices of the supermarkets that militate against primary producers and are not even in the best interests of the consumers. There are many issues of this kind, including the one of single farm payments. In that respect, I say merely that cash flow for those public goods to which the noble Earl, Lord Peel, referred is vital in order to sustain farming businesses at the present time.
	Rural regeneration is also very important, and the impact on Pillar 2 of the CAP and the cuts to it will be enormous. I could never understand why the Government argued before Christmas to put CAP funding at 1 per cent of gross national income, instead of the 0.15 per cent in Pillar 2. There is an attempt to haul the GDP of many areas up to the national average from 75 per cent of GDP per capita in, for example, Cornwall, parts of Wales and parts of the north of England, which is 25 per cent less than what the rest of the European Union is achieving for the social programme of Objective 1 funding. There is also Objective 2, of course.
	Rural disadvantage is enormous. That has been referred to in this debate, and I do not wish to repeat it. I merely add to what the noble Lord, Lord Brooke of Sutton Mandeville, said about the population sparsity funding of the SSAs, in particular, which has been steadily reduced on that formula and has hit services in rural areas very badly. Housing is a crucial issue in areas where the cost of houses averages 15 per cent more than the national average. On the average wage in a rural area, it very often takes eight times the average annual earnings to meet the value of the house that a first-time buyer is trying to buy. These are all factors that push people out of the rural economy and, in so doing, a lot of dynamism is lost in the rural economy. Extraordinarily, the banks are not being socially responsible and are trying to close branches. Indeed, they have closed 4,000. In my area, we had to meet the regional manager at the regional branch and place placards outside his door to keep the branch open, because the next one was 17 miles away.
	Very briefly, to finish, I have been involved in a number of initiatives both with young farmers and 50 year-old-plus people to start new businesses. Prime-Cymru—a Prince of Wales charity, of which I am a member—has started 1,000 new businesses, created by 50 year-olds with 12 business advisers in the past three years. The businesses vary between finding one's own family roots, making ice cream out of sheep's milk, dog beauty parlours, making and marketing paintings, making harps, and producing organic chickens. There are many initiatives of that kind, but they need finance, risk capital and market town initiatives in order to succeed. I could go on, but I have no more time. Many initiatives require help, and there is not enough of that at the moment from central and regional government.

Lord Harrison: My Lords, I, too, thank the noble Baroness, Lady Miller, for initiating this excellent debate. I want to remind the House that a rural economy relies on a sound economy in general. I pay tribute to the Government because the IMF, in its December 2005 report, says that the UK's impressive record of macro-economic stability owes much to good macro-economic financial and structural policies, underpinned by a sound policy framework.
	Is there a problem? Yes, there is, but in certain pockets of the countryside. Roger Turner, a Countryside Agency economist, says that there are sometimes discrepancies between the perceived and the real problems in the countryside. Farming may well be in decline, but he goes on to say that in the broader view, including all types of businesses, not just rural businesses, the picture is very different. Indeed, according to the CRC's State of the Countryside 2005 report, many rural residents enjoy comparatively high levels of household income. We discovered how that same report describes these pockets. It argues that there are two rural Britains: one which is well off, in less sparse areas, associated with people who are commuting; and then a poorer rural Britain, often in sparse, peripheral areas of the United Kingdom, mostly on the fringes of towns or villages found in those remoter areas. We should be concerned about those areas because often they contain families with children living in real poverty. That is why we must do something.
	The Government's policy should be twin-tracked, not only supporting shrinking industries such as farming. The Government have done so since the election, with the whole-farm approach, introducing innovative IT systems, cutting, apparently, £28 billion in red tape for farming. There is also their new farm business advisory service, funded by £7.5 million. The Government recognise that the farming industry may be shrinking, but it is important to try to give support. We should remind ourselves that at best farming provides only 4 per cent of work within the countryside.
	I want to ask my noble friend the Minister about other forms of support from the European Union, including the LEADER programme, which is the six-year programme for fostering partnerships of local organisations in the countryside. Will he give us a report on that, it is an important initiative whereby we share best practice with our cousins elsewhere in the EU?
	As has been pointed out by the noble Lord, Lord Cameron, there has been a sea change—one might say a land change—in the way in which the economy is based in rural Britain. A clear example, subject to a recent report, was the prediction that within the next 10 years the rural traditional craft industries will provide more jobs than farming. How does my noble friend respond to that report and how can we encourage the resuscitation of such crafts?
	We should also adopt a policy of supporting other kinds of industries which are already with us. Despite what the noble Lord, Lord Cameron, said, tourism is important. It mirrors the profile of those in the countryside because it can reach the parts that others do not. The countryside often has a higher degree of SME formation, sometimes in the sparsest areas by 3:1 over their urban equivalents. Of course, there is home working, which is labour-intensive. There are many good examples of tourism flourishing. I consulted my local Visit Chester and Cheshire tourism board, which told me about some of the initiatives. One is supporting an enterprise called "Spa and Pampering"—somehow, never has Cheshire seemed so exotic as when represented by that one. I was also pleased to learn that my old stamping ground of the agricultural college at Reaseheath now provides a business centre to advise those who seek change and promote business within the community.
	Another example by Visit Chester and Cheshire was the flourishing of the equestrian tourism industry. There is, for example, the stud farm for shire horses at Cotebrook, near Tarporley, which demonstrates the history of the shire horse and its use in the countryside. There are also other forms of equestrian tourism. I make a point about that because those concerned with the advent of the fox hunting ban believed that a perilous loss of employment in the countryside would be associated with it. As I thought might be the case, the reverse is true.
	Will my noble friend also consult the Forum of Private Business and the Federation of Small Businesses, both of which have produced excellent reports on how small businesses might be helped within the countryside? For instance, the Forum of Private Business talks about infrastructure. Examples are impoverished road networks, broadband availability, which has been mentioned today, and labour shortages, which can be dire. The noble Lord, Lord Brooke, mentioned the closure of post offices, which I believe, with thought, could be revived and provide centres for small businesses in particular in a variety of ways. The Federation of Small Businesses points to the national website which the Government have set up to help small businesses, but there is not a separate farming or countryside section, which would be a useful addition. Will my noble friend consider that? These areas are important.
	I want to conclude with one other form through which most of us townies receive knowledge of the countryside. It was set up after the war to help to promote understanding of the countryside, especially farming. It is the radio programme "The Archers". I consulted a great expert on the programme, my wife, and also my noble friend Lady Pitkeathley. They report to me that in some ways "The Archers" does not reflect modern Britain and modern business. Of course, there are many representations of farming, but far fewer representations of the small businesses which populate our rural areas, full of young entrepreneurs. The few examples of business and the use of IT are represented by Lynda Snell's husband and some estate agent, whose name escapes me, who is part of the nouveau riche and is seen as a bit of a wide boy.
	I make these points because that is how the majority of us may receive our information about the countryside. It is time that we modernised that view in order to have a firm basis on which we can go forward and develop the industries, the prosperity and the jobs that people need in the countryside for a better Britain.

Baroness Maddock: My Lords, I am grateful to my noble friend Lady Miller of Chilthorne Domer for this interesting and wide-ranging debate on the rural economy. I intervene to bring to the House my experiences of living in a rural area; they follow on nicely from the closing comments of the noble Lord, Lord Harrison.
	I now live in Northumberland, but I have spent most of my life living in the south-east, which is a crowded area. For a great deal of that time, I lived in a city. I am now living in one of the sparsely populated areas of this country, a long way from the centre of gravity in Britain, which I consider to be London and the south-east. It has been an interesting time. I am now also a county councillor in Northumberland and married to my local MP. Being married to the local MP involves once a year visiting all the villages in his constituency, which is 50 miles north to south. That takes us eight days; most days we drive something like 120 miles. I am not only the chauffeur but the clerk in this arrangement. It has certainly given me a great insight into not only the problems of rural Northumberland, but, of course, the beauty of the landscape.
	My reflections this afternoon are therefore personal. I have become aware of the extra hurdles involved in running an economy in a rural area, some of which have been mentioned this morning. I illustrated the distances that one has to deal with, particularly when one is accessing health and education. There are also the distances from some of the major networks. For example, very few people in my area are on the mains gas supply. My noble friend Lady Miller talked about other reliable infrastructure, such as broadband and digital. We do not have digital. Broadband is improving—we might receive it—but we have some areas where the electricity supply is not always reliable because some of the lines are overhead. The situation is improving, but it is not perfect. Historically, the whole area is a low-wage economy.
	Another main factor—it has certainly affected us and people coming to us—is the problem with delivering emergency services in rural areas. The police, ambulance and fire services have to travel long distances over slow roads. From my experience in the Houses of Parliament, having been a Front-Bencher for a number of years considering national legislation, it has become obvious to me that many central government policies add to the problems that we have. It is not necessarily deliberate, but our whole system is very urban-centric. I have been able to see the huge difference in the time that I have now spent in Northumberland—which, I have to say, is only five years.
	I want to highlight one or two problems that have come to my notice in recent weeks. One of those is transport. With many things such as transport, housing and planning, the Government wanted to have a regional agenda and regional government, and I supported them. Unfortunately it did not happen, but we still have part of it. Whichever side of the argument you come from, the problem is that, if you are stuck with the present arrangements, you have policies handed down from above. That is causing several problems for us.
	One of the most recent problems has been the thorny issue of what we see as the strategic A1 through Northumberland. It is the main line up to Edinburgh from Newcastle and for many years people have been fighting to get it dualled. Recently, we discovered that under the new arrangements from the Government the A1 is no longer a strategic road but is shoved in with all the other decisions that we have to make in our area within the meagre budget that has been handed down. I was at the county council yesterday. We are desperately trying to get the Government to look at the road and say, "Yes, we need a strategic arterial road in Northumberland, as it's of national importance". Only the day before yesterday I was reading about the problems of congestion. All the traffic to Scotland on the roads goes up the west side and through the central part of Scotland. The main railway is up the east side. It seems to me sensible to have good road and rail up both sides.
	In Northumberland, we used to have the Rural Transport Partnership, but now our regional development agency, One NorthEast, has taken away the money funding an officer that had helped to produce good results in the area. Another problem we have had—not necessarily regional—is rail services. We have excellent main line rail services—I would not be able to do what I do if we did not—but on the stopping stations in-between the service is not quite so good. There is a train that goes from Newcastle up to various places, with its final station at Chathill, which is in rural north Northumberland; the train then goes a little further to Belford, where it turns round, but there is no station there any more. That is an extraordinary situation. For five or six years or more, people have been trying to get the station open. The train goes there—it is not a problem—but health and safety has said that the driver might not know on which side to open the doors. With all the changes that have happened in running the railways, this is a big issue. We hope that at last the new authority will look at that issue, but such matters are simple and should not arise.
	Other noble Lords have mentioned housing. This is another problem. The figures for the houses that can be built in the area come down from central government through the region and they are based on urban policies. We have been told that, in an area such as ours, we must preserve the countryside and therefore can build only 60 houses per year in Berwick borough. But if that is what you do, as the noble Baroness, Lady McIntosh, said, your villages and towns become unsustainable. If you go just across the border into Scotland, you will see that in the Borders region a completely different attitude has been taken to development in the smaller towns and to the provision of transport links: the A1 is dualled for most of the way on the other side of the border. Will the Minister look at the policies that have been implemented in the Scottish Borders, because we are just next door and we could benefit from similar policies?
	When making policy, the Government should always be thinking about what effect it is going to have on rural areas. We have suffered from the change to out-of-hours provision by doctors. The decision was disastrous; it was made by people living in cities who had no idea what would happen in our area. I do not have time to go into it. Similarly, the decision to make people apply for a passport in person is another issue—we can perhaps go to Edinburgh or Newcastle. Can civil servants think about rural areas when they are drawing up policies? What has happened to rural-proofing? I would like the Minister to talk to us about that. I also ask him to look again at the regional administration agenda, which is not working in our interests at the moment.

Lord Chorley: My Lords, in thanking the noble Baroness, Lady Miller, for initiating the debate, I want to talk about the new CAP. Here I greatly endorse the remarks of the noble Earl, Lord Peel, who has much more experience than I do. Between now and 2012, how we adapt to it will have a dominating effect on our rural economies, particularly on our upland areas and their communities. It is on the uplands that I want to concentrate. The future of the upland communities depends on a symbiosis of farming and tourism. Most of our national parks and AONBs are uplands and they are some of our finest landscapes, as the noble Baroness, Lady Miller, reminded us. Their attraction depends on their being actively farmed. I emphasise that without farming they would revert to scrub. But in economic terms they are fragile. Cumbria, for example, has one of the lowest GDPs per capita in England. For decades the farmers have depended on subsidy, and as we all know, a production-based subsidy—a headage-based subsidy. As is well known, the new CAP is now in the main a single-payment hectarage-based subsidy. In the uplands, that is having a dramatic and alarming effect.
	Last summer, the National Trust analysed the future prospects of 60 of its tenanted hill farms in the north of England. The analysis showed not just that larger farms, especially those with large areas of moorland, did much better than smaller farms, which was to be expected. The major finding was that smaller farms would under Pillar 1 be loss-making, some seriously so. That was particularly evident in the Lake District, where the average farm size is 900 hectares compared with, for example, 1,500 hectares in the Peak District. A further factor emerged: smaller farms tended to be more intensively grazed—that is, they were overgrazed, so the switch to hectarage has been a double whammy for them. But, environmentally, it was a good thing because overgrazing had been a problem. We now are perhaps likely to face the opposite problem of undergrazing.
	What is to be done? Some responses, such as diversification, bed-and-breakfast or part-time farming are not really a true answer. Certainly, amalgamations will in particular cases be a possibility, albeit a reluctant solution—an "if all else fails" solution. One is left with the agri-environment measures of Pillar 2 of the CAP, the so-called rural development regulation budget. It seems to be clear that the future of many of these upland farms, and hence the local tourism economy, will depend on how the RDR budget is developed. It would be most helpful therefore to have the Minister's thoughts on that. What, for example, is likely to be the extent of switching funds from Pillar 1 to Pillar 2—modulation, to use the jargon—and over what timetable? The noble Earl, Lord Peel, spoke about that with more authority than I can.
	I am told that the Government are consulting widely on this, which is surely to be welcomed. I hope that these consultations are wider than pure farming considerations. I hope that they take on the wider aspects of upland economies and the experience of our national park authorities, NGOs such as the National Trust, the CLA, and so on.
	The more that I think about this complicated subject, with its technical Euro-jargon, the more striking I find the contrast of the Euro-bureaucratic world with the real world whose problems it seeks to address. It is a world of farms of all shapes and sizes, of varying characteristics and of different traditions, which are run by people and families who are the custodians of some of our most important landscapes. In our uplands, they underpin a much wider economy. That contrast suggests that we need to come up with a shopping basket of environmental goodies. We need to get away from the blanket solutions; to understand and tackle the issues at a farm level; to provide advice and training; and we may need to provide exit strategies for retiring farmers or as a result of amalgamations.
	If we are to ensure the future of our upland landscapes, a good deal of modulation or agri-environment farming will be needed. It will need to be of a rather tailored nature, tailored to individual farms. I am reminded of a European Union Committee report published in November 2002, which warmly commended "whole farm" management schemes, which may be the appropriate way forward.

Lord Desai: My Lords, we are all very grateful to the noble Baroness, Lady Miller, for initiating this debate. I am particularly grateful because when I saw the topic, I thought that I had better find out something about the rural economy. I do not live in a rural area. I am not even what I might call a townie with a weekend rural property—a twerp, for short. But I have views on agriculture and the rural economy, which I would like to share. I welcome CAP reform. I was against CAP for a long time. The more that we reform CAP and the less we spend on subsidising farming across Europe, the better not only Europe would be but also the world. CAP and export subsidies have done a great deal of damage to the third world. The sooner we can get shot of this, the better.
	I congratulate the Government on trying their best during the UK presidency to link budgetary reform to CAP—even offering the UK rebate for it. Sadly, western interests are very powerful, so we still have some way to go. I hope that eventually we will have an agricultural policy in Europe which is of benefit to Europeans and the world at large.
	On looking at the state of the rural economy, I turned to the Defra report on social and economic change published about two years ago, which sort of matched what I thought rural areas were like. Some people who live in rural areas make a conscious lifestyle choice to live far away from it all. Having made a lifestyle choice, they complain that they are far away from it all—that they do not get regular transport or other things. That is precisely why they moved to the rural area. They moved there because there is no traffic, noise or pollution. All of us want to live in a remote area where everything that we need is supplied only for us and everyone else can stay away.
	However, the data show that rural areas are not being depopulated: they are being repopulated. There is a higher growth in the rural population than in the urban population. As my noble friend Lord Harrison said, we should make a distinction between the two parts of the rural population. Obviously, where there is good access to towns there is prosperity and few problems. It is in the remoter parts where we have to concentrate our attention and see how we can improve the lives of people. There again, there is a tendency to exaggerate problems, just as when we discuss the National Health Service. We have to say that nurses' morale has never been lower than now. Everyone says that every time it is discussed. Similarly, people always say that rural poverty is terrible, and so on.
	Although the numbers may be wrong, they do not bear out any notion of a great deal of rural poverty. The index of multiple deprivation cited in the report states that 94 per cent of people who suffer from multiple deprivation live in urban areas, 29 per cent of the population live in rural areas, and only 6 per cent of multiple-deprived people live in rural areas.
	Numbers have been bandied about on earnings. Again, it turns out that in rural areas with access to cities, income is higher than in urban areas. It is only in remote areas where income is lower. But it is not that much lower. The difference is about £3,000: earnings are approximately £23,000 in remote areas, £26,000 in urban areas, and £29,000 in rural areas with access. It seems to me that we are not talking about great deprivation. What is interesting, however, is that people are choosing to move to rural areas, especially retired people and people who want to raise their children in more salubrious surroundings. Given that it is a problem arising from life choice, one ought to respond to it accordingly. The Government ought to provide services that help people enjoy their lifestyle choices, but it is not, in my view—and maybe I am being very complacent—a panic situation. It is not a story of urban deprivation or crisis. People have mentioned that there are all sorts of shortages in rural areas: affordable housing; transport; lack of broadband; lack of post offices, and so on.
	Therefore, I propose that Defra—and I do not expect my noble friend to answer this—should research a proper price index for rural living. Well-being is a different matter, because obviously bluebell woods and so on add a fantastic amount to well-being. I do not begrudge those things. If people want to live there they can live there; it is their business. I would not live there. Given that there are frequent complaints about affordable housing and so on, it would be interesting to see how true this is. If there were a different price index for rural areas, as against urban areas, and remote rural areas as against accessible rural areas, perhaps we could find out if there really is a problem here. I suspect that the problems of real deprivation—such as unemployment—are to be found more in urban areas than in rural areas. Living in rural areas is a lifestyle choice and I congratulate those people who have made that choice. I do not think this is a dire problem.

Lord Bradshaw: My Lords, I challenge the analysis of the noble Lord, Lord Desai, which we have just heard. I want to speak for the people for whom living in a rural community is not a lifestyle choice; they are the people who live there now. I am not concerned about the people who decide to retire to a rural village or people who have made a lot of money elsewhere and wish to buy a house in a rural village. I am talking about the people living there now, whose fathers and grandfathers often lived there. They live in cottages and small houses which, when they come on the market, get snapped up, usually by people who want second homes and who like the country lifestyle, but retreat to urban areas.
	Nor am I debating whether people in urban areas are poor: that is not the subject of today's debate. The subject is the people who live in rural areas. My analysis suggests that there are two problems to be confronted. The first is rural housing; we have heard it mentioned by several people. It is absolutely essential, in my view, that each rural district council or housing authority sets aside some area in the locality where they will produce some houses that can be afforded by people on basic wages in that area. I do not use the word affordable, because I am not certain what it means. Those houses should not be subject to any sort of right to buy. I am advocating not a system by which people can make a lot of money out of property development, but a system by which housing will remain available in the locality for people who have some association with the area and contribute to the rural economy, not people seeking second homes or who want somehow both to enjoy country life and live elsewhere.
	The first thing I ask the Minister is whether he is completely satisfied with the housing policy, as it is promulgated by government to district councils; whether sufficient money is made available to them; and whether the arrangements for the purchase of land for those houses from the agricultural stock around the village are fair and likely to lead to the production of good houses for people who live there. I contrast the policy there with that for the redevelopment of farms. Often, local authorities are very generous in their interpretation of the rules about the redevelopment of farm buildings. Barn conversions are often for, again, the more affluent people, and certainly not targeted at many of the people from rural areas.
	The noble Lord, Lord Harrison, is not in his place at the moment, but I was in a very rural part of Cheshire and the one new house being built there, in a country lane, was an enormous establishment for a footballer, it is rumoured. I do not begrudge the footballer his money but we seem to have our priorities for housing totally wrong. The man who looks after the cows on the farm where I stay is to retire soon and they need a new cowman. What is needed is premises where he can afford to live, not footballers who commute from Merseyside or Manchester.
	The second issue I wish to raise is that of rural transport. Obviously, we do not want to see any railway lines closed. I suggest to my noble friend Lady Maddock that the excuses about health and safety as to why a train cannot call at her local station are a lot of nonsense. I hope the Rail Regulator will sort them out, because I fear that health and safety is trotted out as an excuse for not doing something when, in fact, there is no rule or regulation preventing it. So often, an excuse for not doing something is so much more convenient than doing something about it.
	We are wasting a lot of money in subsidising rural bus services. I am an Oxfordshire county councillor and know how much it costs to subsidise very inadequate rural bus services. I am going to take my text from the noble Lord, Lord Brooke of Sutton Mandeville, and trespass on the enormous good will that exists in a lot of villages. I suggest to the Government that it would be a far better use of money to make a present of a minibus to each village that undertakes to operate that bus, to take people to work and college, bring them back again in the evening and provide a shopping and leisure service. I am not suggesting that any bus of this sort should go all the way to the town or city, but it should at least take people to a railway station, or a point on the main road where the network of bus services that can be sustained is provided. We would give up trying, as I know we have in many areas, to tip good money after bad in providing inadequate and very little-used rural services.
	What I am suggesting in many ways builds on the work of Wheels to Work, mentioned by the noble Lord, Lord Cameron. The small initiative, which builds on the inventiveness of people living in rural areas, is far more likely to succeed. But whether it is something which can be taken through the bureaucracy and made to work is another question. I hope that the Minister will address this point when he responds to the remarks made by the noble Lord.
	I want to make one last point concerning aeroplanes, an issue raised by the noble Baroness, Lady McIntosh of Hudnall. Aeroplane noise is the cause of a lot of concern in rural areas. An opportunity to do something about it will arise in the Civil Aviation Bill currently before the House. Could the Government suggest to National Air Traffic Services and the Civil Aviation Authority that a rule should be in force against routing aircraft across national parks and areas of outstanding natural beauty? If not, before long, every part of this land and every person will be subject to the noise inflicted by aircraft.

Lord Newby: My Lords, it was with some trepidation that I agreed to take part in this debate because I have been a townie all my life. It is a bit like a non-lawyer speaking in a debate on home affairs in your Lordships' House. You take your life in your own hands. I am particularly grateful to the noble Baroness, Lady Prosser, and the noble Lord, Lord Desai, who have provided a certain amount of townie support through their participation today. I also come from a part of the country where, during my lifetime, I have seen all the basic industries collapse completely. I have a certain amount of sympathy with people living in rural areas who have also seen a considerable degree of change. I hope they will accept that change—and change not always for the better—is not something that has affected only rural Britain over the past couple of generations.
	A number of noble Lords have stressed the need to take a balanced view of what is happening in rural Britain, and that it is not a two-dimensional picture. In his intervention the noble Lord, Lord Harrison, referred to two types of rural Britain. However, as the debate has progressed, it is clear that there are many sorts of rural Britain and that the economic picture overall is very far from bad. There are arguments over exactly what proportion of Britain is rural, but if we accept that it embraces around 25 per cent of the population, it is interesting to note that only 11 per cent of income support claimants come from rural areas. That gives us some idea of the balance of where multiple deprivation lies.
	I turn to the complex question of economic growth in rural areas. I hope noble Lords will not mind that my speech is peppered with statistics from Yorkshire and the Humber, but it is the region I know best. Economic growth over the coming decade for rural Yorkshire is estimated at 27 per cent compared with 31 per cent for the urban areas. One's first response may be that of slight concern. However, those rural areas embrace the Yorkshire Dales, which are extremely sensitive environmentally and where the pressure of people, whether living in the area or visiting it, can threaten the fragile ecosystem. That demonstrates how the question of economic growth in rural areas is complex: while economic growth is necessary, it is not as straightforward as it is in urban areas suffering, say, from a major deficit of aggregate demand.
	However, a common theme of today's debate is that there are rural areas in which more needs to be done in order to improve the economic infrastructure and to promote sustainability. I shall concentrate on the kind of innovation we need to see. When we refer to industry and the economy in general, we are talking about innovation. It seems to me that the only way in which rural areas will prosper is by adopting the same spirit in their approach to economic development. Inevitably one starts with agriculture, and here I agree strongly with the noble Earl, Lord Peel, and his remark that farmers and landowners, while not numerically forming the largest proportion of the economy, are responsible for maintaining what we see when we look at rural Britain. Given that, the regime within which they operate is hugely important. Both the noble Earl and the noble Lord, Lord Chorley, raised issues about the way the restructuring of the CAP is to work. There seems to be a considerable degree of confusion in this area and I look forward to the Minister's attempt to clear it up.
	I also agree strongly with my noble friend Lord Livsey on the question of farm gate prices and the fact that there has been a transfer of surplus, as it were, from the farmer to the supermarkets. This is a difficult issue to resolve without over-regulation, but my noble friend's suggestions on the role of the OFT are valid.
	There is a great deal of innovation in the agricultural sector. Over recent months I have read of four initiatives that demonstrate the interesting and positive ways in which the sector is developing. Given the lack of guaranteed prices, it is good to note that the financial markets, and LIFFE in particular, are offering an alternative and relatively low-cost way of ensuring prices for grain. That is a sensible, market-based approach to change. Turning to the changes in the EU sugar regime, I admire the way people are now looking at the viability of bioethanol. That too is a positive response to change and one that helps to build on the sustainability agenda in more than one way. Farmers are increasingly specialising in organic produce which they can sell into domestic markets. However, farmers are having to learn new skills in the areas of marketing and packaging. In the past, they did not need to worry about those elements. Finally, the RDA in Yorkshire, through its food processing cluster approach, is looking at how to source more food within the region to be processed locally. That is an encouraging activity and another example of positive innovation.
	We have heard a lot about the problems of transport and, again, there are interesting developments in this area. Some rural railways have been opened up as community enterprises and provide small examples of how innovation has worked well. The Wheels to Work programme mentioned by the noble Lord, Lord Cameron, is, I believe, receiving financial support from Yorkshire Forward. It is a good, low- cost proposal. I also support my noble friend Lord Bradshaw in his remarks about minibus services versus fixed bus routes. Another innovation which I know operates in some urban areas—my mother is a beneficiary of it—and builds on the scheme described by my noble friend is a system whereby retired people run what is in effect a low-cost taxi service providing transport for other retired people when they want to visit friends, attend hospital appointments or do their shopping. That is an innovative approach to a major problem which avoids the excessive bureaucracy that often accompanies a more formal system.
	We have heard a lot about various new sources of employment in rural areas. It is fascinating to note that the small and medium-sized enterprise sector is so buoyant and that, as a proportion of the population, there are more self-employed people in rural areas than in urban ones. I suspect that most of us do not expect this area of the economy to be strongest in the countryside.
	Many noble Lords have spoken of the need to extend broadband coverage. The roll-out of broadband is growing, but much still has to be done. This is another area in which the regional development agencies are in a good position to take the lead. Further, much job development around our historic market towns should take place for reasons of sustainability and the environment. Many of our market towns have had a rough time over recent decades. I particularly congratulate Yorkshire Forward on its Renaissance Market Towns initiative, a 10-year programme addressing development in market towns in the same way that government has looked at urban redevelopment; that is, taking the long-term view and considering holistically the issues of property, skills and so forth, thus raising the whole area over the longer term. In terms of ensuring that market towns and villages are places where people want to live, this is a good approach, especially in its emphasis on making life more satisfactory for everyone. It addresses cultural life as described by the noble Baroness, Lady McIntosh, and community life as described by the noble Lord, Lord Brooke. Both are hugely important.
	On housing, there seems to be a consensus among those who have spoken that smaller, incremental developments in small rural communities is a way forward.
	On delivery, at the moment there is a muddle as to how rural policy is delivered. Looking at the plethora of initiatives that have to fit into regional agendas on rural policy, the whole thing is a mess: Defra pathfinders, local enterprise initiatives, local area agreements and city regions. The latter has not come from the regions themselves, but is an imposed response of abject failure by the Government to sell their regional agenda. All these things leave a major problem for regional development agencies, which are doing a good job on balance of attempting to grapple with rural problems. They are trying to work with a framework set by government that simply does not meet their needs.
	On balance, there is much positive news to have come out of today's debate about the future of rural Britain. The Government could be making a much more positive contribution, not necessarily by spending more, but by being more efficient and competent and by giving rural areas more freedom to develop in ways that best suit them rather than Whitehall. If the Government can get these things right, I believe that the prospects for our rural economy can be better than at any time in a generation.

Baroness Byford: My Lords, I begin by thanking the noble Baroness, Lady Miller of Chilthorne Domer, for giving us the opportunity to have the debate on the state of the economy in the rural areas of the United Kingdom. I am sure that she would say that she has been rewarded with a wonderful cross-section of contributions.
	We have gone from considering the community spirit to sparsity funding. We have talked about the arts, the support that local communities give, opportunities and the practical problems of gangmasters. As someone involved with Concordia, which helps to bring people in, I appreciate that particular contribution. We have talked about the huge changes taking place, police reforms, sparsity funding, tourism and young entrepreneurs. We have also had an interesting contribution from the noble Baroness, Lady Maddock, about the very rural and the remoteness of some areas of the countryside, and from the noble Lord, Lord Desai, who challenged those of us who live and work there; we also covered the importance of rural housing and of transport generally. It has been a worthwhile debate and I congratulate the noble Baroness.
	The state of the rural economy varies from place to place and from activity to activity. In many places tourism is good at providing a living for those who work in hotels, restaurants and visitors' attractions, and on farms. Sadly, however, there are areas suffering from the counter-attraction of cheap air fares to the Mediterranean, particularly in spring and autumn. It is disheartening that it is cheaper for a family of four to fly to some European destination than it is to put enough fuel in the car to go from London to Cornwall and back. The reason for that is the lack of fuel tax on aviation fuel, compared with car transport. There is also the pollution caused and the night-time flying that afflicts several of our villages.
	As other noble Lords have indicated, agricultural incomes have been at a low for a number of years. It is not easy to predict area by area or region by region what will happen under the new single farm payment system, but the recent 2005 Farm Business Survey shows that 16 per cent of farm households have an income of less than £10,000. Total income from farming is estimated to have fallen in 2005 by 11.4 per cent in real terms. If some of those who have jobs elsewhere had a fall of that degree, they would be very worried about their incomes.
	By diversification farmers earn extra living and income—by renting out production units in former farm buildings, by adding value to agricultural products, by using their land for activities and by encouraging people to come and visit their farms. Many have developed, as the noble Lord, Lord Cameron, said, high-tech, specialist small businesses. Those are to be welcomed.
	However, in some areas village retail has contracted. The growth of supermarkets has put pressure on small grocery and other shops. Whereas in the past you were able to buy fresh meat or fresh bread from a number of villages, in some parts that is now becoming difficult. The only opportunity one gets to buy those, along with homemade cakes, pots of jam, home-grown vegetables and local, high-quality products, is usually at farmers' markets.
	Larger villages have a GP's surgery, even if some only have them open on one or two days a week. They also have a number of pubs—sadly, many have closed—and some specialist shops have survived in some areas.
	As my noble friend Lord Brooke reflected, in many villages the community spirit is there. That is perhaps highlighted in the contribution of the church and, if I might link it in the same way, the post office, which are centres of activity. I was pleased to hear the example of the noble Lord, Lord Brooke. In our local village we managed to add a meeting room to the back of our church, which took a lot of doing, but was worth it and people supported it.
	The position of postmasters and sub-postmasters and postmistresses who have tried to add groceries, vegetables and other things to their shops is fairly precarious. There are some 14,500 post offices in the United Kingdom today, and 8,000 of those are in rural areas. They belong with one or two of the other small food chain shops, which work from the arrival of newspapers in the morning before 6 until 8 or later in the evening. The reward for those efforts is limited—the income is small. But there is still competition from big business and big banking, which wish to nestle in on what they are providing.
	As recently as 22 September last year, the Under-Secretary of State, Barry Gardiner, confirmed that the Government understood the social value of the post office network. He accepts that the Government must improve the lot of the most disadvantaged, who rely on post office services. Nevertheless, he confirmed that the current special payment scheme will end in 2008.
	I would briefly like to highlight one of the problems with regard to the post office. There has been great pressure from the Government for people to have their payment of benefits paid through banks rather than through post offices. I can speak from personal experience, because I recently followed that path myself. There is pressure put on you at every stage. The response to my written letters confirmed that the Government would much prefer to pay into your bank. All I can do in the time allocated is to say that this is another wedge that will stop the footfall of people who used to go their post offices to claim benefits. That will have greater spin-off effects, to which the Government need to give serious consideration.
	The Government are failing many people who live and work in the rural community. They are without a long-term strategy for farming and appear to be unconcerned about United Kingdom food security—the Secretary of State has stated consistently that domestic self-sufficiency is not needed or desirable. They want to drive down the cost of food, but seem unconcerned about the miles that food is transported or the pollution caused and they do not acknowledge the increased CO2 emissions, which are a consequence of that decision. My noble friend Lord Peel very sensibly raised that issue.
	The Government also fail to seek derogation from—or to oppose—legislation that keeps coming from Europe. They cut back on the funding of important projects, recently and regrettably including the cut back of the UK wildlife research centres. We heard yesterday how the national park in the Lake District was to receive a below-inflation grant settlement. But chairmen of the English park authorities warned Defra last month that the spending standstill would result in an "unacceptable reduction" in the ability of the parks to meet those Government targets for sustainable development. We do not have joined-up government here.
	On the positive side, though—the Minister will be glad to hear me being positive—he announced earlier this week that the bulk of the single farm payments would begin in February and be completed in March. I ask him again today, because he did not answer me yesterday: what percentage of farms will that cover? How many farms? How many farmers whose claims are yet to be dealt with will be left outside that bulk? What happens to those who are still struggling to get the RPA to respond to their letters and deal with applications? I wrote to the Minister on 12 January this year, bringing to his attention two such cases. I am sad to say I have not yet heard from him. I hope a response will come quickly.
	I would also like to correct the Minister when he said the other day that our party welcomed the changes proposed to the single farm payment. He was not the Minister at the time. I urge him to look back at Hansard when we heard the Statement. He will realise that I clearly raised my concerns on the situation between English, Welsh and Scottish farmers, let alone farmers overseas.
	Many people have touched on affordable housing, which is critical. I share many of the comments of the noble Lord, Lord Bradshaw, on that. But again I should like to be positive. I will turn to wider issues. I welcome the Government's U-turn in not closing 100 cottage hospitals, which are of vital importance to local communities. However, I urge the Government to think through their new proposals for primary care trusts, where there is already great pressure on GPs to provide the services they are now required to.
	The Government keep producing new strategies—some welcome, some questionable—but, whatever the pressure, they pass down the delivery to local authorities. The trouble with national funding is that it often does not follow these new strategies, and the pressure on local authorities forces them to raise their council taxes. The Government need to give this some serious thought, and accept that those responsibilities they pass down must be fully funded. I too am concerned about the suggestion that the police force should amalgamate into bigger and bigger units, because very rural areas will be jeopardised.
	I am a minute over my time, and I apologise. Again, I thank the noble Baroness, Lady Miller. It has been an excellent debate.

Lord Bach: My Lords, I agree with what the noble Baroness has just said: it has been an excellent debate. It probably could not take place anywhere else within Parliament in such an able way. There is a huge amount of expertise in your Lordships' House and we have heard a great deal of it today. If I have a criticism, I would say there was a degree of negativity in the debate, though not from the noble Baroness, Lady Miller. There was a little too much on the negative side and not enough about the positive, and I regret that. It is easy to be negative and to talk down the good things that are happening in the countryside and in farming. Sometimes the talking down becomes self-fulfilling.
	I have no chance of answering all the questions that were asked of me during this debate. If I were to do so we would be here at the weekend. I hope to touch on some of the issues in what I have to say, and if there are any outstanding matters of great importance to noble Lords, I will write.
	We have been reminded today of some of the great challenges that face people and businesses in our rural communities. These challenges should not be underestimated, but, as I have just said, we must not paint a picture of doom and gloom, because the facts simply do not bear that out. The economy of rural areas is in many ways in a strong position, in absolute terms and compared to urban areas. I want to mention a few facts to demonstrate this. Unemployment is down across England, and stands at less than 3 per cent in rural areas compared to around 4 per cent in urban areas.
	My next fact is one that the noble Baroness may contradict: average earnings in rural areas are higher than those in urban areas. The figures I have from the Commission for Rural Communities report State of the Countryside 2005 suggest that the average income in urban areas is £29,189 and some pence, and in rural areas between £30,630 and £36,787. In other words, it may be close, but rural areas clearly have the advantage. In some rural areas, particularly those close to our major cities, average earnings are at the very highest end of the spectrum. On the whole the rural workforce is more highly skilled, with an above-average number of graduates too. The noble Lord, Lord Newby, asked about broadband, as did my noble friend Lady McIntosh. The figure for broadband availability in rural areas is now 99.3 per cent.
	It is important, though, to keep the story of success in mind when we come to focus on what are genuinely difficult issues and problem areas. What are the challenges? In some areas there continues to be a preponderance of low-paid jobs; areas such as south Shropshire, where more than 60 per cent of employees earned below two-thirds of the median English wage rate in 2004—that is, less than £6.23 an hour. While one cannot draw a simple causal link, it is interesting to note that south Shropshire also has the highest proportion of employees working in farming, more than 50 per cent of those in employment. I can see the noble Lord, Lord Biffen, nodding his head.
	Other areas are sparsely populated—the noble Baroness, Lady Maddock, spoke about a sparsely populated part of the country—or are far from urban areas and their markets, and have to overcome the barriers posed by distance. We will continue to ensure that Government policy does not exclude these areas from enjoying the fruits of economic growth. Many noble Lords raised the issues facing our farming community, which is such an essential part of our countryside. It does not have much to do with the proportion of people who work in farming; anyone who goes to our countryside knows that it is a farm-made countryside.
	In approaching these challenges, sustainable development must be at the heart of our strategy. That is simple common sense in rural communities. Economic, social and environmental issues are inseparable. Many rural businesses, whether farming, tourism or lifestyle businesses, depend directly on the quality of the natural environment. Equally, access to services and community cohesion underpin the development of new and existing businesses. That is why the Rural Strategy 2004 sets out our three linked priorities for rural policy: first, economic and social regeneration; secondly, social justice, fair access to services and affordable housing; and thirdly, valuing the countryside as rural England's and, dare I say it, rural Wales's greatest asset.
	Perhaps farming illustrates more than any other industry the importance of an approach to the rural economy based on sustainable development. Although farming is no longer the dominant economic activity in the countryside—the noble Lord, Lord Cameron, described it as no longer the backbone of the countryside—it remains at the heart of many rural communities, and its activity impacts on a vast area of our countryside. I firmly believe that there is a bright future for farming in this country. Farming's future will be different from its past, but a bright future exists. Through our Strategy for Sustainable Farming and Food—I was slightly surprised that the noble Baroness, Lady Byford, said that we had no long-term strategy for farming—we will continue to provide the support that farming needs through the dramatic current period of change. The strategy identifies how the Government will work with the whole of the food chain—and that means producers too—to secure a sustainable future for English farming and food as viable industries contributing to a better environment and healthy and prosperous communities. Part of that approach comprises the whole farm approach that has been referred to and the farm advisory service— both of which were mentioned by my noble friend Lord Harrison.
	The implementation of CAP reform and the single payment scheme in particular are integral to our vision of sustainable farming. Subsidy payments have been decoupled from production so that farmers are now free to produce in response to the market rather than what subsidies dictate. That should have happened years ago. I well understand that a successful and timely start to payments under the single payment scheme is the major preoccupation in the farming industry at the present time. Noble Lords will not be surprised to hear that it is for me as well. The announcement I made on Tuesday that full payments will start before the end of February, with the bulk made in March, will, I hope, provide some reassurance on the issue. The noble Baroness knows that I cannot answer her question accurately on how many payments will be made by the end of February or by the end of March. I cannot do that because we are still in the process of making sure that those payments are made.
	All this is designed for a purpose—to lead to an industry in which farmers are rewarded for enterprise and are able to farm with the grain of the market. But economic success in this day and age must, of course, go hand in hand with environmental quality. The countryside that we see today, and which we all value so highly, has, as I said, been shaped by farming practices over generations. That is why I believe that public money should reward farmers for the landscape and environmental benefits which they can provide.
	Alongside the reformed CAP, the new environmental stewardship scheme further rewards the delivery of additional environmental benefits beyond cross-compliance through higher standards of environmental management. Through such measures we are supporting the crucial role that the farming community plays not only in producing safe, nutritious food—I put on record that it is our view that the farming industry plays a vital part in producing a large amount of the food that we eat—but also in protecting and enhancing our landscape, wildlife, soils, water and other natural resources. In that way we can look to a more secure future for the farming industry and a better environment for all of us to enjoy.
	We have had mention of the uplands. The noble Lord, Lord Chorley, and others mentioned the problems that those farming areas have. I am happy to tell the noble Lord that there will be a public consultation—as he wished—on how we should progress with regard to the uplands. The present scheme ends at the end of 2006. We look forward to hearing what he has to say. We understand the important role that that part of the country plays in England.
	Looking beyond farming for a moment—

Earl Peel: My Lords, from what the Minister has said, can I assume that he regards the single farm payment as a payment made to farmers in exchange for providing good environmental and animal welfare, and that it is not a subsidy? That is a very important question to which the farming community would be very interested to know the answer.

Lord Bach: My Lords, the noble Earl cannot assume that. It is a payment for public goods but it is also a subsidy from government. If I had to choose a word for it, it would be a "subsidy". It is based—thank goodness, not in England—solely on historic subsidy. In Wales and Scotland it is based 100 per cent on historic subsidy—the years 2000 to 2002 being the crucial years. In England we have been a little more farsighted. We already have a flat rate based on land held. Frankly, it is a question of semantics whether you call it a payment or a subsidy. When the Government are paying out £1.7 billion or thereabouts, one can still call it a subsidy.

Earl Peel: My Lords, are agri-environment schemes subsidies? Is that what the noble Lord is saying?

Lord Bach: No, my Lords, I am not. I have eight more minutes in which to speak. I am very happy to debate this with the noble Earl on another occasion.
	Looking beyond farming, our strategy is to minimise regulatory burdens and at the same time provide support to help enterprise flourish. We are working with England's regional development agencies to increase their activity in support of the economy in rural areas. This ensures a strategic economic development within each region, considering the needs of both rural and urban businesses, which are surprisingly often similar. We are ensuring that money is directed to areas which need it most. This year the regional development agencies have received £72 million from Defra. They will receive a similar amount in each of the next two years. We have successfully engaged them as key strategic partners in the delivery of our aims for rural areas.
	As I noted earlier, in rural areas unemployment tends to be low. However, many jobs are low skill and low paid or seasonal. Jobs in the food industry and tourism are important examples. Such sectors are important in rural areas. With RDAs and sector skills councils, we are doing our best to address low skill level jobs, and we are working with a range of partners to develop a framework which will provide a greater career structure—which is one of the problems—to jobs in the land-based sector. We are also working to ensure that the potential of the tourism industry is more fully exploited.
	When I talk about work in the country, I have to address the comments that my noble friend Lady Prosser made in relation to the gangmaster scandal, which was shown most blatantly in the tragedy which occurred. She acknowledged that the Government had acted quickly and firmly to put an Act on the statute book, with the help of other political parties. We have some issues within government about who should be included and who should not. I refer in particular to the field of processing. We are determined to tackle gangmasters who act illegally and exploit their workers. We are currently considering the outcome of two consultations on the draft exclusion regulations. The main agricultural exclusions proposed in the first consultation are largely acceptable, subject to some redrafting. The Government hope to be in a position to announce the outcome of both consultations by the middle of this month. I confirm that the GLA is on track to commence licensing from April 2006. I am very grateful for what my noble friend had to say on that very important issue.
	I have mentioned broadband. Commuting can also be reduced by ensuring that a range of housing is available in rural areas. The availability of affordable housing for both rent and purchase—mentioned by the noble Baroness, Lady Miller, and many other speakers today—is vital to a prosperous and vivacious countryside, helping to support diverse communities which are socially and economically vibrant and inclusive. That is why in July this year—as we promised in our manifesto—the Affordable Rural Housing Commission was launched to identify ways of improving access to affordable housing for people in rural areas. Our work on affordable housing will contribute to ensuring that housing is available at all levels of the market and provide a full range of local labour supply, allowing businesses of all sizes to change and develop.
	The commission will consider the evidence and reach a consensus on the relevant issues with regard to affordable housing needs in rural areas. This is real progress, but noble Lords will quite rightly want to wait and see what the results are. Assistance to the rural economy is provided by Defra through funding support under the England Rural Development Programme, which is the, by now famous, Pillar 2 of the CAP. This programme directly contributes to all three strands of sustainability. The current programme has provided £1 billion to farmers for more effective environmental management of their land through the agri-environment schemes. The new environmental stewardship scheme, launched in March last year, builds on the success of the environmental sensitive area scheme and other schemes. More than 65,000 applications packs have been issued, and it currently has more than 12,000 live arrangements in place, covering nearly 1.4 million hectares under agreement.
	In addition, assistance of more than £200 million will have been provided to the rural economy through the programme's project-based schemes: the rural enterprise scheme, the vocational training scheme and the processing and marketing grants. While much of this funding is directed towards agriculture, a proportion is set aside for wider village and community activities to deliver sustainable local enterprises, including social enterprises that we have heard about today at first hand, such as community shops and post offices. The rural enterprise scheme is the main route through which Defra channels assistance to farmers to diversify their agricultural business. Nearly £46 million has been committed from the scheme to help farmers diversify. While these grants provide support for individual farm businesses, there are also gains for the wider rural economy. By way of example, a farm shop and café funded through the scheme has been so popular that it has expanded, creating more local jobs, providing outlets for other local food producers and is now a venue where local people meet.
	The new EU rural development regulation agreed last September provides the basis for funding the successor programme. I have not got time to go into the details of where we are in terms of that funding. Those who were present last night will know that we discussed this issue during the debate on Amendment No. 203 to the Natural Environment and Rural Communities Bill. Noble Lords can see in Hansard what I said about the state of play as it is now. The House will want to know more and there is an Oral Question on this on Tuesday. I will also write to the noble Baroness who raised this with the state of play as it is now.
	I have to finish in the course of the next minute or two. At a more local level, we want to continue to provide support for local village shops. The Government have assisted local services by extending mandatory rate relief at 50 per cent to include sole-village public houses, petrol stations and village food shops under the village shops scheme. We have issued planning guidance advising local authorities to adopt a positive approach to planning proposals designed to improve the viability, accessibility or community value of existing services and facilities. Taken together, the action I have outlined demonstrates this Government's strong and continuing commitment to a vibrant and diverse rural economy in England. We have to build on the success and prosperity that is enjoyed by many rural communities, but we must not be complacent about the significant challenges that face farming and other rural businesses and the communities they serve. That is why we will continue to make supporting successful rural enterprise a high priority and why we will continue to invest public resources to reflect this commitment. I thank the noble Baroness again for initiating this debate.

Baroness Miller of Chilthorne Domer: My Lords, I thank all noble Lords who have spoken. The breadth, depth and quality of the contributions have given enormous food for thought. I shall certainly enjoy reading them. I hope the noble Lord, Lord Harrison, takes the opportunity to send a copy of Hansard to the producers of "The Archers" so that they may see the great example given by the noble Baroness, Lady McIntosh of Hudnall, of local sourcing for an entire wedding. I am glad the noble Lord, Lord Brooke of Sutton Mandeville, was able not only to give his own terrific contribution, but to fill in for the right reverend Prelates, from whose presence we were not benefiting. I warmly thank all noble Lords who have spoken and the Minister for his reply to us. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

British Identity and Citizenship

Lord Wallace of Saltaire: rose to call attention to the role of government in promoting citizenship, and in defining British identity and British history; and to move for Papers.
	My Lords, I asked my group to support the idea of a debate on this because we are in the middle of an emerging but so far relatively incoherent debate about citizenship, national history and national identity. Gordon Brown gave a speech last month on the future of Britishness to the Fabian Society at a conference on the subject. He also gave an excellent lecture 18 months ago to the British Council on British national identity. David Cameron, the new leader of the Conservative Party—I was about to say the Liberal Conservative Party—gave one of his many speeches on the subject of Britishness to the Great Britons conference on 30 January. Last November, it was the theme of a Keynes Forum weekend, a group with a loose association with the Liberal Democrats, with Trevor Phillips and a number of other people addressing it. It was also the theme of a political studies conference in early January and it has been the subject of a great many articles in the press.
	The reasons for this revival of interest are evident. There are concerns about how to strengthen a sense of shared national community in our younger generation, for whom the old national symbols of wartime solidarity are a distant story and among whom respect for cherished national traditions and social habits is limited. There is a recognition that we cannot go on living on the legend of the Second World War as our shared national experience now that no one under the age of 70 has direct experience of that war. There are efforts, particularly promoted when David Blunkett was the Secretary of State for the Home Department, to incorporate new British citizens into our national community through the institution of citizenship ceremonies and through introducing elements of British history, values and political principles into citizenship and language courses. There is concern about a degree of disengagement from the national community within some of our ethnic communities in Britain's increasingly diverse society. This has led political leaders to ask whether improvements in history teaching and better education in political rights and obligations might help to narrow the gap and to promote a shared understanding of rights and obligations within our national community.
	There is a slightly less accepted recognition that the history that is taught in our schools does not give children any coherent sense of our national story, or indeed of history at all. My children in secondary school learnt about Hitler's Germany and Stalin's Russia, like most others in their generation. It was a training that educates the rising generation in Euro-scepticism but achieves little else; it certainly does not tell them much about Britain. There is confusion in many areas, particularly in the Conservative Party, about the differences between Englishness and Britishness now that devolution has strengthened Scotland's autonomy. Behind all this, there is a certain unease within our political elites and institutions that the British population as a whole are less engaged in the public life of British society under the British state. We have seen a long-term decline in party membership and a decline in turnout at elections, exacerbated by the reduction of opportunities for citizens to play a part in representative democracy because of the reduction and emasculation of local democracy by successive Conservative and Labour governments.
	This is a broad, even an untidy field to cover. It stretches across several government departments: the Home Office, the Department for Education, DCMS, and so on. Yet the Minister in the current Government who has spoken most fluently about the issue is, of course, the Chancellor of the Exchequer. Its different strands are closely linked and they have direct implications for public policy. For example, the Government have launched a respect agenda aimed at those in the younger generation who have not inherited what Mr Blair and Mr Brown would regard as traditional British values. Nowhere does that dreadfully new Labour document, the Respect Action Plan, which I waded through some weeks ago, spell out the national and social values that disaffected youth should learn to respect or how best those should be taught.
	Across the political parties, again, there is renewed interest in some scheme of national service for young people, whether voluntary or compulsory, to give them a stronger sense of the wider community in which they live and the obligations that they owe to it. Gordon Brown and David Cameron are among many who have floated the idea and there have been many more reports from think tanks close to each of the three parties. Though we wish to teach our younger generation about the obligations of citizenship, we must surely also educate them in the rights of citizenship that balance those obligations. Once we start to talk about citizenship, it is difficult to avoid talking about civil and political liberties and about the full rights and obligations of the citizen towards society and the state, and of the state towards the citizen. That takes us into constitutional reform and issues of representative government, local autonomy and rights, which neither this Government nor their predecessor have wanted to address. I look forward to the publication of the Power inquiry at the end of this month, which I hope will open up this field to wider debate.
	Once we talk about identity, we plunge into issues of culture, language and diversity, of inclusion and exclusion, assimilation versus integration—all the sensitive issues of "Who do we think we are?" and what values, memories or ethnic myths we share in common. Once we talk about history, we face politically loaded questions about how to interpret the tangled history of the multinational United Kingdom and how that history has linked us, in friendship and enmity, to other states and civilizations. It is easy to be partisan about such central issues. For those of us on these Benches, the liberal agenda is essentially about citizenship; it is about the balance between individual rights and obligations to society, and about the extension of political rights to all citizens in a liberal society and a democratic state. One of the reasons why the Government have made so little progress with their citizenship agenda is that—it seems to us—new Labour is deeply confused about how far it wants to defend, let alone promote, civil and political liberties. The language of new Labour talks about "customers" to whom public services are "delivered", not citizens for whom public services are part of what holds the national community together.
	The evidence of political alienation from public life is now very strong. Fewer people voted in last year's election than in any election since 1918, and fewer belong to political parties, so that fewer people have any sense of a link between their lives and political society and the state. For Liberal Democrats, that means that we have to reopen the agenda of political and constitutional reform, which the Prime Minister has so firmly closed. Members of other parties will of course wish to emphasise other aspects of that agenda.
	National history is a highly contested field, as it always has been. Every time I walk through from Peers' Lobby to Central Lobby, I note on the two sides of that corridor the inability of 19th-century political leaders to agree on the history of the 17th century. We have the parliamentary view of the Civil War on one side and the royalist view on the other. As you walk through from Central Lobby to the Commons Lobby, you have the same contested history of the years between 1685 and 1714.
	I first met Conrad Russell, later my noble friend Lord Russell, when he and I were acting as informal advisers to a national curriculum working party on the history curriculum, which was set up by Kenneth Baker in 1989 under the orders of Mrs Thatcher, who wanted to reintroduce a proper national story, as she saw it, into our schools. That effort failed, primarily because the Prime Minister disapproved of its findings. She was surprised to discover that British history was not being taught in English schools and that the inquiry did not automatically have authority over the separate Scottish syllabus. When the inquiry team reported that it would not be possible to construct a coherent history of the relationship between England, Scotland and Ireland without placing it in its European context, she was displeased; when the team also suggested that Britain needed a history syllabus that explained to every child in a British school how they came to be British—which meant teaching about the slave trade, the opium war and the conquest of India—she delayed the publication of the final report for several months, and it was never implemented.
	Gordon Brown in his recent speech touched on the politics of memory and of national symbols. He noted that Remembrance Sunday has become our prime ceremony for national solidarity, and he suggested that it is time for us to think about creating another official national day. As it happens, I watched on television the whole of the Remembrance Sunday celebrations last November, and I was struck by how poorly it institutionalises the politics of memory for our current age. It was a very white and very British ceremony. Almost no one in this country, including those of Indian descent, have any memory that the second largest contingent in the British armies of the Second World War was the Indian Army. The noble Baroness, Lady Flather, has now succeeded in getting a memorial to those other armies that fought in the Second World War, carefully placed behind Buckingham Palace so that not very many people see it. Surely we could have a Remembrance Sunday that celebrates our allies and our Commonwealth partners rather more than just with the small group of elderly West Indians walking at the back of the parade just in front of a small group of Czechs and Poles and an elderly bunch of American Marines. We could do a great deal better than that if the Government were thinking through what it means to memorialise the past in a way that celebrates our present and our future.
	The Chancellor of the Exchequer alluded to the French celebration of 14 July. Two years ago, the French used that parade as a celebration of Franco-British defence and foreign policy co-operation. Contingents of the Guards, the Household Cavalry, the Marines and others marched down the Champs Elysées—good positive European symbolism. Some of us are waiting for the British Government to respond to that; I suspect that we will have to wait a very long time, as the Government are rather scared of the press in symbolising the depth of our European commitment.
	Shall we have a new national day, as the Chancellor has suggested? Perhaps a constitution day? We would find ourselves immediately wallowing in controversy if we were not careful. Would we like to celebrate 1689? The Ulster Unionists would love that, but the Catholic Church might not be quite so enthusiastic. Similarly, 1605 has anti-Catholic connotations. What about the Queen's Birthday? That would raise, very delicately, the role of the monarchy as a uniting national symbol. The monarchy does its best to hold the national community together. I went to the service in Westminster Abbey to celebrate the 50th anniversary of the coronation, which I had sung in as a boy—it which was a very Protestant ceremony without a single Catholic or anyone else present. I was struck when on the 50th anniversary the Cardinal Archbishop read a lesson, and down under the transept were representatives of Britain's other faiths: Jewish, Muslim, Hindu, Sikh, Buddhist, Zoroastrian and Baha'i. That was a constructive use of national symbolism.
	I went to a citizenship ceremony last year. I thought that it was okay but limited. When we sang the national anthem at the end, it included no reference to Britain, to liberty or to democracy. It is the world's oldest national anthem and, as I researched it, I found out that it was first sung in London theatres in 1745 as an English anthem against the Scots. The fourth verse begins:
	"God grant that Marshall Wade . . . victory bring",
	against the "Rebellious Scots". That is not necessarily the most appropriate national anthem for us to continue using now that devolution is here.
	We are teaching citizenship in British schools. We are not teaching it very well; indeed, the Chief Inspector of Schools said last January that citizenship was the worst-taught subject in the secondary curriculum. A booklet published by the Home Office two years ago, Life in the United Kingdom: A Journey to Citizenship, stated:
	"The Government has decided that those who become British citizens should play an active role, both economically and politically, in our society, and have a sense of belonging to a wider community".
	Do the Government really want to promote active citizenship? That is a very wide agenda as we face an increasingly passive citizenship among our native population. It would start with teaching citizenship in schools in a more active way. I took a rapid poll of teenagers who live nearby about what they were being taught in schools. Some of them said, "Well, it's mainly about drugs". One or two of them said, "Well, we had one lesson on the European Union". None talked about the British constitution as such. I suggest that we promote a cross-party approach to try to build a national consensus for the next generation. That would be an appropriate subject for the less partisan Chamber, the House of Lords, to consider. Perhaps we might consider setting up a sessional committee for next year.
	The Chancellor of the Exchequer said last month:
	"I believe that out of a debate, hopefully leading to a broad consensus about what Britishness means, flows a rich agenda for change: a new constitutional settlement, an explicit definition of citizenship, a renewal of civic society, a rebuilding of our local government and a better balance between diversity and integration".
	That is a large, but very good, agenda. I beg to move for Papers.

Baroness Massey of Darwen: My Lords, this is an interesting and topical issue and I congratulate the noble Lord, Lord Wallace of Saltaire, on introducing it so comprehensively. The focus of my comments—appropriately, following his speech—will be about citizenship education in schools and about what it should be, not what it is.
	First, I have to say that I mistrust the concept of citizenship and national identity if that consists of xenophobia, or boastful self-centredness. For me, citizenship is about living in a community and having a responsibility towards that community, as well as towards oneself. It is about relationships with others, with the community and even the global community. I shall maintain that consideration for others is the basis for citizenship, whatever one's identity is.
	In preparing for this debate, I reread the final report of the Advisory Group on Education for Citizenship, which points out that citizenship has evolved from being the right of a narrow class of people to include the rights of women—although there are few women in the corridors that the noble Lord described— lowering the voting age, freedom of the press and opening up of the processes of government. My noble friend the Leader of the House, in the Walter Rodney Memorial Lecture in 2004, pointed out another dimension—that many of our black, white and Asian young people may feel marginalised from key institutions in society. We cannot pretend that racism and discrimination are not part of our society, and that there is not a requirement to challenge it.
	Citizenship for what and for whom? What should education for it be about? The advisory report recommended a broad educational base for citizenship, to involve young people in learning self-confidence and social and moral responsibility, both towards those in authority and towards each other. It should be learning about becoming involved in the life and concerns of communities, and service to the community. It should be learning about how to be effective in public life through knowledge, skills and values. That is all very good.
	If that happened, we would have a great opportunity to get young people participating in active and exciting opportunities. But are we? I know that the noble and learned Lord the Attorney-General is not from the DfES, but maybe he can pass on my question about whether citizenship education is taken seriously in schools or pushed to one side in the pressure for academic results. There are many examples of exciting and innovative programmes, but how widespread is that? Such education is too important to be left to chance. Schools are mini-communities, gatherings of citizens and young people who should, as well as learning academically, learn about discipline, relationships, values, motivation and aspiration.
	Citizenship education in schools has been a foundation subject in schools for 11 to 16 year-olds since 2002. It has three strands: social and moral responsibility, community, and political literacy. For example, pupils aged five to seven should be able to take part in discussion and keep rules, appreciate that they belong to various groups and communities, and learn how to look after their environment. Pupils aged 11 to 14 should learn about legal and human rights and responsibilities, key aspects of parliamentary government, diversity of backgrounds in Britain today and the world as a global community. Again, that is all very well, but what about the practical means of delivery?
	I want to refer, as a good example, to a teaching pack on citizenship for 11 to 16 year-olds produced by the Advisory Council for Alcohol and Drug Education, and I must declare an interest as a trustee. There are lesson plans with outcomes. For example, in lesson 14 the outcome is that pupils,
	"will have worked cooperatively to increase their knowledge and understanding of human rights and will have considered their own role and responsibilities to protect human rights locally and globally".
	The key element there is about working collaboratively and expressing opinions, as well as about learning how institutions work; for citizenship is surely about being collaborative, not just about learning facts.
	I wish to quote a letter on that theme, in the same teaching pack, from the principal of a school in the United States. He said:
	"I am a survivor of a concentration camp. My eyes saw what no man should witness. Gas chambers built by learned engineers. Children poisoned by educated physicians. Infants killed by trained nurses. Women and babies shot and burned by college graduates . . . My request is: help your students become more human . . . Reading, writing and arithmetic are important only if they serve to make our children more human".
	The same could be said of citizenship education. It is about learning to be a considerate human being, and overzealous notions of citizenship could be an excuse for bad behaviour.
	That wise and wonderful writer E M Forster stated in an essay, Two Cheers for Democracy, in 1938 that he mistrusted causes. I hope that citizenship will not become a cause. He also reminded us that Dante placed Brutus and Cassius in the lowest circle of hell because they chose to betray their friend, Julius Caesar, rather than their country, Rome. So I give two cheers for citizenship and the concept of citizenship education. I would make it three cheers if I were convinced that what we want to inspire by citizenship and national identity was about enabling people to relate to others and to make the most of our common humanity, both nationally and globally.

Lord Carey of Clifton: My Lords, I too am grateful to the noble Lord, Lord Wallace, for introducing this debate and outlining the issues so clearly. We should remind ourselves that we are not the only country that is wrestling with concerns about identity. The United States is doing so with respect to the influx of Mexicans and those from elsewhere. Nearer to home, the waves of asylum seekers to mainland Europe are opening a debate that CNN at the weekend entitled, "European identity in crisis".
	It is therefore understandable that the Chancellor, Gordon Brown, recently called for a deepening of British identity, with a national day set aside to celebrate values and aspirations that are central to our idea of nationhood. As the Chancellor did not articulate in any great depth the parameters of national identity, my contribution to this debate is to offer some reflections on what I regard as major signposts where particular elements of our identity are located. I shall leave to one side the issue of citizenship to which the noble Baroness, Lady Massey, referred.
	First, I offer a cherishing of parliamentary democracy and rule of law under the symbolic and constitutional headship of the monarchy. It must concern us all here that so many people do not value their democratic rights, as the noble Lord, Lord Wallace, has already mentioned. Those rights were so hardly won for us by our forebears that greater efforts must be made to encourage participation in citizenship and public life. That so many people question Parliament today, and regard politicians as being in politics merely for their own good, must alarm us all—however unjustified we find such conclusions.
	Another reference point for British identity must be our culture, under which I subsume language and history. It is so easy to forget that our rich language is not the creation of the British people alone. We need to avoid the danger of believing that there is such a notion as pure, unadulterated culture or racial purity. The nationalist party in Britain—mercifully small—claims that this country should be protected from the invasion of minority-ethnic cultures, faiths and creeds, and that non-white people should be run out of town. However, that fascist creed flies in the face of history. Britain has been the recipient of many invasions of peoples over the centuries, most of them unfriendly; as a result, our national language and character have changed. Multiculturalism is not to be feared, but is inadequate on its own. It is merely a stepping stone to its goal of common unity in shared values and a commitment to democracy.
	I believe that many of your Lordships would share my concern that history seems to be a marginal subject in quite a few schools these days. Yet few other subjects, as the noble Lord, Lord Wallace, has said, are as vital in informing our knowledge of where we have come from and who we are today. History draws us into a national family. It makes us aware of our heritage and the painful yet enriching way that we have learned to tolerate differences, to speak openly and freely and to enjoy argument and debate at every level of human intercourse. A thorough grasp of history is a sound antidote to the increasing relativism and secularism of our day.
	It is not my intention, in this short contribution, to make the case for the Christian faith being at the heart of our nation. None the less, it has clearly made a huge contribution and nourished the nation in so many ways that I, personally, would find it incredible if we tried to define our nation without mentioning the place of the Church. Yet, in mentioning faith, there is a particular challenge facing British Muslims. That concerns the tension between the demands of faith on the one hand and those of the secular communities in which religious communities reside on the other. In his fine book The West and The Rest, Roger Scruton makes the point that unlike Christianity, where the claims of faith and secular life are clearly separated, as expressed in the words of Jesus:
	"Render to Caesar the things that are Caesar's, and unto God the things that are God's",
	in Islam the concept of umma gives priority to religious duties over all other sources of authority. That is, Islamic jurisprudence does not recognise secular jurisdiction as a valid source of law.
	My many conversations with Muslim leaders around the world reassure me that that difference between the West and the Muslim world can be resolved. However, for that to happen, this subject must also be brought out into the open and made part of our debate on identity. That returns us, then, to recent debates on freedom of speech; most recently, to that on religious hatred. The decision of the House of Commons on Tuesday was—from my perspective—a timely recognition that freedom of speech under the rule of law is a great good, and that we should never attempt to throttle it. Because religion is so important to people's lives, it must also be open to inspection, debate and argument.
	I shall close with a story. There was once a rich Jewish gentleman called Finkelstein. He was rushed to the finest hospital, Massachusetts General. Then, without explanation, he checked himself out and went to a small, run-down Jewish hospital in New York's East Side. An official from the first hospital asked him, "Was there something wrong with Massachusetts General Hospital? Was it the doctors?". "No", he said, "they were outstanding—the very best. I can't complain". "Well, was it the nurses, then? Weren't they attentive enough?". "No", he said, "they were wonderful, like angels. I can't complain". "So was it the food? Was that insufficient, or too boring?". "No", he said, "the food was delicious—just heavenly. I can't complain". So the official said, "Mr Finkelstein, why then did you leave one of the finest hospitals in the world for this run-down hospital in the East Side?". Finkelstein gave a big smile and said, "Because here, here I can complain".
	Perhaps that comes close to what British society is all about. It is an open society where we all mingle freely as equals, without fear of oppression—proud to be British.

Lord Giddens: My Lords, let me join the rapidly forming queue to congratulate the noble Lord, Lord Wallace of Saltaire, on initiating this debate. It is always a pleasure to debate with esteemed colleagues from the LSE, of whom there are no fewer than three in this debate. The subject is, manifestly, highly important; but, as the noble and right reverend Lord, Lord Carey of Clifton, briefly remarked, it would be a fundamental mistake to suppose that the debate is limited to our country. In fact, nations all round the world are troubled by their identity and are trying to invent a new sense of their purpose in the world.
	The reasons for that are, fairly clearly, related to the new global age in which we live. As the American social and political thinker Daniel Bell so famously said, the nation state in the global age becomes too small to solve the big problems, yet is too big to solve the small ones. That does not mean that the nation or the nation state disappears; far from it. One could say that the nation state becomes, as it were, the universal form of the state in the 20th century. However, it means that nations have to rethink their identity—and to some extent the notion of sovereignty, which was a kind of anchor of nations' past identity.
	I take it that these changes are the backdrop to the Chancellor's recent interventions. In his recent speech, which has already been alluded to, the Chancellor said that what Britain needs is a codified sense of purpose and, as he put it, an explicit mission statement. He suggested various rituals and innovations which might help sustain a renewed sense of purpose for the nation. In spite of what has already been said so ably by the noble Lord, Lord Wallace, the Chancellor has been widely ridiculed for his pains.
	I recall reading an article, which I think was in the Times, where the journalist dismissed Gordon Brown's speech as tendentious tosh. I am not completely sure that tosh can be tendentious, but the Chancellor was right to say that a sense of patriotism is compatible with progressive politics. I remind those on the opposition Benches that we are all progressives now.
	It is right to question a notion of national identity which, until recently, held a lot of currency. That was a backward-looking notion of an isolated nation, with the belief that sovereignty can be retrieved by going back to a largely mythical past. Sovereignty must now be defended in conjunction with other nations, not alone, so it is right to question that. It is also right to suggest that we need to hold Britain together as a nation state by belief. I am a believer in what I would call the cosmopolitan nation; that is, one in which a diversity of cultures can co-exist. I am therefore strongly against Scottish nationalism, because we need larger nations. We do not need an endless fragmentation of nations, especially along quasi-ethnic lines. The Chancellor was right in his stated intentions, but there are questions we should ask of both him and ourselves—or some observations, which I shall make.
	First, I suggest that we drop the dead donkey; that is, drop the idea of Britishness. The very term "Britishness" is odd. I do not know of anyone who speaks of Frenchness, or Americanness. They speak of American values, or the French civilising mission. I believe, along with the noble Lord, Lord Wallace of Saltaire, that we should speak of Britain as a citizenship nation. That is what holds the nation together and gives us a coherent identity. If you speak of Britishness, you are looking for an elusive, essential identity which does not really exist.
	Secondly, it is right to celebrate our ambiguous pluralism. All the debates about British identity contain an endless series of questions about being English, British, Scottish or Welsh and so forth, with the implication that we somehow have to sort all these things out. I do not think so. It is a strength of British identity to be pluralist. In the contemporary world, we must all have several identities. It is not simply a weakness that allows us to be a more cosmopolitan state.
	Thirdly, we must strongly resist the temptation to distort history. We must recognise, for example, that the British Empire had a noxious history in some parts, along with its achievements. We must teach history as it was, but that does not mean that we cannot pick out and celebrate achievements, such as the freeing of the slaves. It does not mean that we cannot invent rituals around democracy and freedom, but it means that we cannot pretend that these are unique to us, or that they are the only strands of British history, because they are not.
	Finally, we must avoid what I would call the Cool Britannia syndrome. Why did Cool Britannia fail? As any advertising person could have told the people who initiated it, it is no good selling a product purely on the basis of image; you must have, behind the product, something to deliver. It was an ad man's empty notion. That means that, to reinvent Britishness and reconstruct a sense of purpose for the 21st century, there must be something substantial behind it. For example, achievements of citizenship must be celebrated. Why not also celebrate some anticipatory goals? For example, Linda Colley, in her lecture as part of the Prime Minister's lecture series, suggested the goal of eliminating child poverty as a forward-looking ambition of a democratic and egalitarian society. Also, why not include the lead-up to the Olympic Games in 2012, which is bound to be a unifying force?
	As individuals, we would find it hard to live without a sense of ambition. We would find it hard to live without a sense of purpose. Why should nations be any different?

Lord Thomson of Monifieth: My Lords, I join other noble Lords in thanking my noble friend Lord Wallace of Saltaire for raising the topical but important, and evidently controversial, subject of Britishness.
	We are all, of course, British citizens within the United Kingdom. Yet the word "Britishness" comes a little uneasily and self-consciously to the lips of many of us in these post-imperial days. Our sense of Britishness has been forged gradually over the centuries out of three nations—one larger and two smaller—living on a middle-sized offshore island of Europe, and enjoying a remarkable degree of insulation from external aggression.
	The parliamentary and political integration of England, Wales and Scotland was completed by the start of the 18th century, and was followed by the economic integration of the three nations in the industrial revolution, in which Britain led the world. History has therefore given us the priceless asset of lively and diverse national cultures within a firm political and economic framework of integration. The English, Scots and Welsh are now inextricably mixed up with each other. Speaking as a Scot, this enables the Scots—and, I think, the Welsh—to enjoy the best of both worlds; we can vigorously deploy our Scottishness and Welshness alongside, and perhaps because of, the more numerous but fortunately more easygoing English, who take their nationalism less seriously than we tend to do in Scotland or Wales.
	Years ago, before we joined the European Union, I remember leading a team of British ministers to Dublin for a regular review of our trading relationships. We had ministers from the Treasury, the Board of Trade and the Ministry of Agriculture and Food. By curious coincidence, we were all either Scottish or Welsh. It was not a particularly successful meeting, because the Irish were seeking concessions which we did not think it in the British interest to make. After two hours of abortive discussions with the Irish, I remember the formidable Mr Haughey—or it may have been the even more formidable Mr Blaney—saying, "Where are the English? We'd far rather negotiate with them! Let's go and have some lunch".
	We are all a mixed-up lot on our island, and are becoming more so with the immigration that has been taking place. The sense of being British, however, goes all the deeper and is all the more real in the 21st century for not being expressed stridently or in a jingoistic manner. I agree with the noble Lord, Lord Giddens, on this. We need to adapt our sense of being British to take account of some dramatic changes since the Second World War, both in the world around us and inside the United Kingdom itself.
	One of these major changes has been the arrival of the United Kingdom in the European Union. I recall a debate in your Lordships' Chamber, quite a number of years ago now, in which the then Lord Chancellor, the noble and learned Lord, Lord Mackay of Clashfern, and I took part. By curious coincidence, we came to the same conclusion: we agreed that we were Scottish by birth and culture, British by citizenship and, now, European by conviction. We saw no contradiction in any of these positions.
	The European Union faces many challenges, but the fear that it was going to destroy our national characteristics in a drab Euro-identity has largely dissolved. There is no sign that the French are becoming less French, the Dutch less Dutch or the British less British. Today, the pressures on our British sense of identity come not from Brussels but from within our own borders. The historic development of devolved government to Scotland and Wales has brought about a healthy decentralisation of decision-making, and a liberation of democratic energies. At the same time, the significant immigration from the third world, and the search for political asylum in this country, has expanded our working populations and enriched our cultural diversity. It has also, however, created new tensions and pressures for special and divisive provisions being sought in both education and social policy.
	Without vigorous, positive action, the present benefits of devolution could easily degenerate into narrow nationalism. The positive aspects of religious and ethnic diversity and mutual tolerance could equally easily give way to divisive, communal bigotry. For these reasons, I think this debate has been a timely one, and I strongly endorse what the noble Lord, Lord Wallace of Saltaire, has said about the role of the Government, and the importance of giving priority to promoting a sense of British citizenship, defining a British identity which new immigrants can be proud to seek and accept, and creating a shared sense of British history. I feel that the best interests of people in all parts of Britain lay in making a success story of a truly United Kingdom in the 21st century.

Baroness Young of Hornsey: My Lords, like other noble Lords who have spoken today, I very much welcome the opportunity to debate this really important issue, and recognise its timeliness. I agree with much of what the noble Lord, Lord Giddens, has said, particularly with regard to interrogating the very notion of Britishness. That is really what I want to focus on today.
	In October 2000, the report of the noble Lord, Lord Parekh, on The Future of Multi-Ethnic Britain was launched to a storm of publicity, much of it adverse, which overshadowed its intellectually informed, cogent analysis. The report, produced after months of research and consultation led by a commission chaired by the noble Lord, Lord Parekh, mapped out current and future directions for policy makers in the context of contemporary, multi-ethnic Britain.
	The furore focused on a comment in the report about the potentially racist connotations of "Britain". This was reported in the press as a claim by the commission that to use the term "British" was to use a racist term. Anyone who had read the report properly would have seen that this was not at all what the commissioners were saying.
	In recent times, notions of Britishness have been linked inextricably to migration. The focus of these debates has been primarily on peoples of African, Asian and Caribbean descent, who have settled here since the 1940s; but we should not forget that historically people of Irish and Jewish descent have also come under scrutiny in terms of their perceived "alien" status.
	In referring to a set of values or qualities that characterise a nation, we always, of course, want to adopt positive terms. "Tolerant" and "inclusive" were, I think, words that were used by the Chancellor to sum up part of the British character when he spoke, as has recently been referred to.
	Clearly, if we look objectively at those qualities and many others of the national character, we cannot say that these attributes are exclusive to white Britons. Some of the people who settled here having travelled from Africa, Asia or the Caribbean experienced kindness and acceptance. Many others endured physical and verbal abuse and exclusion from the notion of Britishness because of its equation with being white. The vast majority of those settlers and their daughters and sons exercised a great deal of restraint in the face of this intolerance and exclusion—exclusion from sections of the labour market, from decent housing, from mainstream education and so on.
	It seems that those who urge us to embrace Britishness have not grasped the extent to which many of the people of our parents' generation felt an absolute allegiance to Britain—to the mother country. This lack of understanding persists despite our contributions to war efforts, as has already been mentioned in relation to the Second World War—but from the Battle of Trafalgar to Iraq today, we have made that contribution. Despite all the support and contribution given to the National Health Service and our contribution to the sporting success and entertaining the nation, still our allegiance and Britishness is questioned.
	If our role in the political, social and cultural development of Britain is omitted from the national curriculum, from higher education, erased from history books or left to gather dust as curiosities in museums and if we experience this continued rejection, it is not surprising that Britishness feels like a total illusion to some.
	I want briefly to say something about multiculturalism. The chairman of the CRE, Trevor Phillips, and the Liberal Democrat MP, Dr Vincent Cable, are among those who have called for an end to the multicultural society. I have to confess that I am not sure what that means. Multiculturalism is defined in a number of ways. It is such a vague concept that it hardly qualifies as much more than a descriptor—that is, there are many different cultures living in Britain today. That is self-evident. I feel that the signalling of the end of the concept is an acceptance of the fear of difference.
	If we think of multicultural as the juxtaposition of different cultures, rather than a set of policies to mitigate the presence of black people in this country, we can see that Britain has always been a multi-layered, multi-textured nation and, yes, multicultural too. Steelworkers in the north of England might not see themselves as having much of a common culture with public school, Oxbridge-educated, civil servants in Whitehall. Places with strong regional identities, such as Yorkshire and Cornwall, might also feel more than a geographical distance from the middle classes in the home counties; and, of course, as has already been mentioned, the place of Wales, Northern Ireland and Scotland in this notion of a unified British identity might be said to be currently "under construction". After all, we have yet to reach agreement on whether we can field a single Great Britain football team.
	Many people have referred to last year's bombings of London transport, ending with much tragic loss of life and injuries, as a wake-up call and an opportunity to reflect on the limits and the potential of multiculturalism. If we want to understand what drives people to extremes, to fulfil their desire to cause death and destruction, we have to learn to look squarely in the eye of that which might cause us some discomfort.
	In order to have a strong sense of what we mean by being British, does that mean that those who do not conform to that notion have to be designated "un-British"—a rather chilling term? The really important issue is—again, this has been touched on by other noble Lords—can we establish a society characterised by a strong sense of social justice, active environmentalism and equality of opportunity, with respect and difference at its heart, both nationally and internationally? Responding to this challenge is what citizenship is all about.
	I understand that one of the national daily newspapers is asking its readers what it means to be British. A view from abroad states:
	"Being British is about driving in a German car to an Irish pub for a Belgian beer, then travelling home, grabbing an Indian curry or a Turkish kebab on the way, to sit on Swedish furniture and watch American shows on a Japanese TV. And the most British thing of all? Suspicion of anything foreign".
	I am sure that most noble Lords are aware that in 2007 there are a number of important anniversaries that are relevant to this discussion. It is 300 years since the Union was formed, 200 years since the slave trade was abolished in the British Empire—I must declare an interest because I am involved in a number of initiatives around that particular issue—and 50 years since Ghana gained independence from Britain.
	The ways in which the Government approach the commemoration of each of these events is important. Each contains the potential to be exploited to both positive and harmful effects. I hope that this House and the other place will work together to ensure that we maximise the opportunities for getting to grips with the challenges we face with creating the inclusive society we desire.

Lord Soley: My Lords, like all previous speakers, I welcome this important debate. There are a number of things that the noble Lord, Lord Wallace, said in opening with which I agree. I disagree with some of his comments about respect, which I thought were a bit provocative and missed the very important point that actually respect comes basically from good parenting, and then you build on that. That in a way is what the Government are about but in a much wider agenda.
	I agree with him that we have spent too much time in our history lessons on people like Hitler and Stalin, important though they are in teaching people the warnings of history about dictatorship, and far too little on such things as immediately after the war when Britain had a very large hand in drawing up the German constitution, which, in my judgment, is one of the most successful constitutions in the world today, and in drawing up the human rights legislation in Europe, which many people make the mistake of associating with the European Union, even though of course we did not sign it until many years later when the present Government were elected. But perhaps those who do not take such a generous view of British history as I take would say that that is a good example of the British saying, "Don't do as we do, but do as we tell you".
	I also agree very much with the noble Lord about the Commonwealth aspect. The noble Baroness, Lady Young, touched on that with the contribution made during the wars generally. It is not well known, but the British/Indian army, which at its height I think numbered more than 2.5 million people, was the largest volunteer army the world has ever known. That in a way says something very special about the nature of the relationship that existed between Britain and India and, in my view, still does.
	I think that the Government launching of citizenship education is extremely important. I have felt that for many years. As an MP I had some research done in my advice surgery. When we asked people who came with council-related problems why they had come to me as an MP rather than go to the council, a very common reply was, "I thought I'd come to the top". The assumption was that the MP tells the councillors what to do—that it was a pyramid. If any MP or Member of this place tries to tell councillors what to do, in my experience, it works for a very short time—usually about five minutes. Then it goes badly wrong. It is a mistake. However, a constituent said to me during the past year, shortly before I left the House of Commons: "If you cannot help me with my housing"—I had referred her to a councillor—"what do you do?". That says an awful lot about how we do not involve people in their democracy.
	The most important point is that democracy is about participation. The media have a role to play here. If you watch some of our "Question Time"-type programmes, people often respond by saying, "A plague on all your houses". But they leave it there; they do not then go on to say, "What can I do about it?". People have many options. They can not only read the literature from the various candidates, they can put themselves forward as independent candidates; join parties and seek to change them; and so on. We underplay that, so the assumption is that you must be a spectator in democracy, rather than a participant. Democracy, by definition, means involvement and participation.
	We should not get too pessimistic, although it is right to be concerned about falling voting levels. There are a number of explanations for that. We need to be careful even about younger voters. If we consider the area that I previously represented in west London, many young people who were not voting were, from the nature of the population—this is true of Britain as a whole—from ethnic minorities, many of whom had come here recently, in many cases from countries that had been through extreme stress. The former Yugoslavia and the Horn of Africa were two classic examples in my area. They did not have a culture of participating in politics, not least because politics was, at best, irrelevant to their background; and, at worst, deeply frightening and worrying because it usually meant violence, sometimes extreme violence directed against them individually.
	So we need to go through a process, but we can be proud. I also remember a very good friend of mine, a Palestinian, standing up at his first Labour Party meeting with tears in his eyes. He had just become a British citizen and he said to me, "I am so proud because today, for the first time in my life, I have voted in a free election". He was 47. We need to be very proud of that.
	I should declare an interest, because I am chairman of the Mary Seacoal memorial statue appeal. Mary Seacoal was a Crimean War nurse and we seek to establish a statue as a memorial to her—either in Cavendish Square, opposite the Royal College of Nurses, or at the end of Westminster Bridge, outside St Thomas's Hospital. The purpose of that is not just to commemorate Mary Seacoal herself, but what she represents. She represents the enormous involvement of various groups from around the world in being British.
	That is precisely what my noble friend, Lady Young, said so powerfully a few moments ago. My only slight point of difference with her was that she timed her sense of involvement in the British military side of history from Trafalgar. In fact, as she will know, it started long before that. The waves of immigration and the involvement of ethnic minorities in our history are far greater. Indeed, we can see that in the Royal Gallery in the picture of the black sailor on Nelson's ship pointing to the French sniper. About 20 per cent of that ship's complement was foreign-born. At least one captain in Nelson's navy was a black sea captain.
	Finally, we sometimes forget that empire was part of the industrial revolution. The industrial revolution was what made Britain the world's first superpower, if you like—the first global power. That is what drove empire, in a way, although I know that you can trace empire back before that through the slave trade, and so on. If we do not understand and teach that, there is a problem. People will say either that the British Empire was the greatest thing ever or that it was the worst thing ever. In fact, there was a much more complicated inter-relationship with what was the dominant power of the 19th century, based on the industrial process. That is the wider sweep of history that will enable people of all ethnic backgrounds to feel a sense of citizenship in Britain today.

Lord Desai: My Lords, I was born in India. I went to America for study, then I came here. What struck me when I came to Britain was how relaxed the country was about whether or not it was a nation. Glory to the country that is relaxed about its nationhood. Countries that are not relaxed about nationhood have to go to war to prove that they are a nation. Ever since I arrived—perhaps partly because I am middle-class; I have a middle-class job; and I live in a middle-class area—I have never been made to feel not a part of this country. I may be lucky; I think that class has more to do with it than people admit. But I have found it interesting that at no stage, unlike what I might have had to do in America or even India, did I have to affirm my allegiance to anything. No one asked me to salute any flag. There are not many occasions on which the national anthem is played and I have to stand up—not that I mind standing for the national anthem.
	My point is that the whole question of whether we are a nation or not is an anxiety that is not strictly necessary. When new Labour was born, it was somewhat sensitive that the Conservatives had monopolised patriotism and we had to get a little purchase on it. We got a little purchase on it, but the whole point is that we all have multiple identities. We should be happy to carry multiple identities with us and not necessarily have to ask ourselves, "What are you really? Are you black; are you British; are you English; are you a Geordie; what are you?". I could be everything. As occasion demands, as with my credit cards, I will give you the card that is relevant for the purpose. It may be more relevant at the time to assert my race, my background, my citizenship, or whatever.
	An historical fact about Britain is that although the notion of nationhood was born in the late 18th or early 19th centuries—the French invented the notion of nationalism—this was a united polity before the notion of nationalism was invented. That is partly why, as George Orwell said in his famous essay, the English are embarrassed about patriotism. They are embarrassed because it has never seemed to be something worth bothering about. I have written about India and how it had a problem: if it is a nation, why it is a nation; or is it multiple nations constantly trying to define themselves as a single nation? Here, the United Kingdom had the luxury of splitting itself up and devolving power. Suddenly there were four national capitals, not one, but still no one was very much worried about that. When I arrived in 1965, and for 30 years after, the notion that there were four national capitals was unheard of.
	Now we have devolution; and we have a multiracial character. What I find remarkable about 7 July, tragic as it was, was the universal feeling, "How could British boys do this?" It is remarkable that, 30 years after Enoch Powell made that horrible speech, British newspapers, including tabloids, accepted the boys with the bombs as British boys. That is a remarkably big cultural change. My answer to that was, "Why are you surprised, because it is happening in Northern Ireland all the time? British-born boys are throwing bombs, so what is new?", although that is a negative way of putting it. Perhaps I see the glass as half full rather than half empty, but I do not detract from the remarks made by the noble Baroness, Lady Young, when I say that, despite the way in which the tabloids especially have responded to the whole question of accepting and integrating people of different races into British life, it is remarkable how far things have come.
	We are not there yet. There is much more to do. It is interesting not to ask whether someone is a British citizen but to be quite sure that one does not face discrimination, whatever one chooses to be. It is much more important to have a culture of equal rights and not to give people a single label. Anything like a single label or a monotheistic construction of nationality is bound to be wrong.
	I shall say only one more thing because my time is running out. The Motion asks what role the Government can play. I hope that they play a minimal role. I want us separately in our various communities to construct the notion of whichever citizenship or original nationality we want. The Government should play a minimal role in providing a simple framework and not start writing a curriculum and ask us to meet 37 conditions for being British. I would rather that we evolved Britishness in our daily lives by ourselves, rather than have an official proclamation of what it is to be British.

Baroness Walmsley: My Lords, this has been a fascinating debate, and I too am grateful to my noble friend Lord Wallace of Saltaire for giving us this opportunity to talk about what we mean by citizenship and how we foster it. As education spokesman, I am sure that your Lordships would expect me to talk about how we foster it in young people, and you will not be disappointed. Although I very much agree with what the noble Lord, Lord Soley, said about parents, I shall focus on schools today.
	I was delighted when this Government introduced citizenship into primary schools in 2000, and as a statutory foundation subject for secondary schools in September 2002. The framework has three important strands: social and moral responsibility, community involvement, and political literacy. I was delighted about this new subject, not only from the narrow self-interest of a politician despairing at the lack of engagement of young people with the political process and the falling number of those voting, but from the wider community point of view, because this programme should be designed to develop life skills, which are arguably more important to the average young person than anything they learn in their academic subjects.
	Let us not be in any doubt that the introduction of citizenship into the curriculum is a good thing. However, as one might expect, it has not been without its problems in these early days. I believe the Government were well meaning, but I am afraid that I do have some negative things to say. After all the investment and effort in launching this new subject in schools, it is a pity that it has been left to flounder, and that consolidation and continuing investment have not happened as we all hoped they would.
	Last year, there were only 240 PGCE places for citizenship teaching. The Institute for Citizenship has reported that it has closed down many INSET courses because of poor uptake, with teachers claiming that they did not have the time to train. This shows that teachers have to do this work almost as an afterthought. Indeed, 90 per cent of citizenship teaching is done as part of personal, social and health education—not an illogical place for it in the curriculum, of course.
	I am sure that French teachers find the time for French INSET, and that physics teachers find the time to get up to date with physics knowledge. There is an opportunity to bring elements of the citizenship curriculum into every academic subject and not simply isolate it in PSHE lessons. That, however, takes an enormous amount of planning and considerable vision on the part of the leadership team in schools.
	The second missed opportunity is to demonstrate joined-up government. If developing responsible young citizens is really a priority of this Government, why is the Home Office going out on a limb with a confusing plethora of initiatives, some of which are under the respect agenda, which do not appear to be linked at all to the genuine enthusiasm of the DfES for this new subject? After all, the citizenship brand is familiar to those young people who have been studying it since 2000. Most of them know what it means, as do many of their parents. Instead of the many sticks contained in the respect action plan, why are the Government not putting more carrots into the well known citizenship brand and responding to the early findings of the National Foundation for Education Research longitudinal study?
	There is a real need to build on the work that has already been done and to broaden the scope of the work into the community beyond the classroom walls. For example, surely an opportunity for political engagement is being missed by the Government's resistance to lowering the voting age to 16. We should be catching them at the end of 11 years of citizenship education, and getting them into the habit of voting straight away. The NFER study of the operation of the citizenship curriculum has already found that 66 per cent of the students reported their intention to vote in national elections when the time came. If that intention can be turned into real votes, it would be a big improvement on the poor showing of the 18 to 25 age group in the past two general elections.
	The NFER study identifies a considerable gap between the policy aims and actual practice in schools. It reports that schools employ a wide diversity of approaches in the delivery of citizenship education, and although that is not a bad thing in itself, teachers to whom I have talked during their visits to your Lordships' House and another place have pleaded for more opportunities to share best practice and to learn from other teachers about what works best to engage young people and their interest. Certainly there is no shortage of teaching materials and ideas for activities, but, at this early stage, teachers crave more help and guidance with choosing what is most suitable for their students.
	Sadly, although school leaders reported that many opportunities exist for students to participate in active citizenship activities, the take-up rate was low. Perhaps I may at this point recommend the Minister to visit one of UNICEF's "Rights Respecting Schools", as I did when I visited Kempshott junior school in Hampshire last November. Here, I declare an interest as a trustee of UNICEF UK. Hampshire took up the "rights, respect and responsibility" programme when its representatives visited Nova Scotia a few years ago and saw it in operation. Impressed by what they saw, they brought it home and introduced it first to primary and now to some 20 secondary schools. What impressed me was that it was not all about "my" rights to do what I like. It was about your rights and my responsibilities. In the classroom, that translates into: everyone has the right to have their say and they also have the responsibility to listen to others.
	Pupils are encouraged to take part in the school council and the school council reps report back to their classes and consult them about how they want to be represented. The ethos of the school was uplifting, too. They took seriously their responsibility as little environmental and global citizens, learning about basic rights to things like nutrition and education that children in some countries do not have and about the dangers to the environment and they were all doing their own little bit to put those things right.
	It works in secondary schools, too. One year-seven teacher reported that she acts out the part of a naughty child and the whole class laughs. Then she asks them, "How is this affecting your learning?". They soon get the idea that unacceptable behaviour can be dealt with by them as a group and it becomes uncool to mess about. You now hear 12 year-olds say, "Stop that, we have a right to listen to this". Is that not the sort of responsible empowerment that we want in our young citizens?

Baroness Howells of St Davids: My Lords, I, too, welcome this debate initiated by the noble Lord, Lord Wallace of Saltaire. I say to him, "You're a very brave man indeed". It is proving to be very interesting, with many insights into the subject. I want to make my contribution on my own personal journey and take your Lordships back to basics.
	I was born on the tiny island of Grenada during the days of the British Empire. In those days, it was said that the colonies were more British than the British. We certainly felt very British. We knew, almost by rote, most of the great poems and novels of English literature. We sang with great gusto the national anthem, "Rule Britannia" and "Land of Hope and Glory", and we could recite the kings and queens of the realm from Edward the Confessor to George VI. We knew about 1066 and the Norman invasion; the Reformation; the Glorious Revolution; the Restoration; and of course the industrial revolution, which touched very much on us.
	How patriotic we were. We even sent ingredients from the islands for Her Majesty's wedding cake. That was a great contribution from a small country to our belief in Britain. We gloried in the knowledge that Britain was the mother country and this great Palace of Westminster was the mother of all parliaments. Britain was the centre of our universe and we all wanted to be part of it. We were British subjects of the Crown, and since the days of Queen Victoria all those who lived in the Empire enjoyed equal status under the Crown. Dr Samuel Johnson said:
	"Patriotism is the last refuge of a scoundrel".
	It was not to me. My patriotism was tied up with a sense of British history and how we from the Empire fitted into that great family of Britishness.
	When I came to Britain in 1951, what I knew about what it meant to be British had to change dramatically. The Union Jack, which I had cheered as a child and carried and waved on 24 May each year, was posted through my letter box smeared with excrement and a note, "There is no black in the Union Jack"—a very popular chant of the time not only among the extreme anti-immigrant groups, but, it seemed to me, among those who should have known better. Sadly, a large number of people I know encountered this type of bigotry in everyday situations and continue today to experience those insults, although sometimes we think that they have gone away. There were, of course, also many great acts of welcome and kindness. It was difficult to understand why some people behaved as they did.
	I was in my view as British as anyone. Then came the "rivers of blood" speech by Enoch Powell, the National Front marches, the political campaigns in Smethwick, the sus laws and their overuse in relation to young black people and talk by a British Prime Minister of "swamping". In that context, the murder of young black men because of the colour of their skin came as no surprise, shocking as it was. By then, I was tending to agree with Dr Johnson. Those who wrapped themselves in the Union flag were not scoundrels; they were racists engulfed in the myth of white supremacy. I needed to re-educate myself on British history—the history of the British Empire in which millions and millions of free-born African men, women and children were captured and transported in slave ships to the Americas and the Caribbean to work the plantations to bring wealth to this mother country—to learn that the British Empire was not glorious for my ancestors. Their sweat and blood propped up the great industrial revolution and made lucrative lives for the UK citizens.
	That was new thinking for me and it had to be worked through. Just as I was coming to grips with the new situation, however, the country began to change. It was now cool to be British again, what with British pop, cool Britannia and the flag to be reclaimed from the racists. That certainly featured highly in new Labour's victory in 1997. Now that we live in a United Kingdom whose Welsh and Scottish constituent parts have begun to devolve themselves, there is a great debate among those of us who live in and were born in England but are of a different colour: are we English or British first? Is that the only question? Most Welsh people I speak to say that they are Welsh: the word "British" does not get a look-in. There is still a move towards regionalisation—a balance that some groups applaud and others deplore. How do we as a nation rationalise those changes and accommodate attitudinal change, which is what we should be talking about?
	Terms along the lines of the US "African-American" or "Asian-American" will not fit easily here, because the one identity, American, is much more clear-cut than Britishness is. When four young Muslims born in Britain chose to blow themselves and many others up on that terrible day in July 2005, did they see themselves as Muslim first and British second, or just as Muslims? The Chancellor of the Exchequer has called for a national debate on what it means to be British. Forgive me if I sound jaded, but have we not missed the boat on Britishness? Do we not now need a proper examination and a stock-take of how all the people on these shores came to be here? Is not that the real purpose of studying British history, if we are to make sense of where we go from now? Will British history reflect my history, or will it be the same his-story? My question to the Minister is: if we are to make citizens out of subjects and Brits out of blacks, Muslims and, increasingly, eastern Europeans, do we not need to be less focused on old notions of British history and Britishness, so that we do not become scoundrels, to use Dr Samuel Johnson's word? I hope that he will agree that we need to have a true sense of what our patriotism means before we begin to define citizenship.

Lord Smith of Clifton: My Lords, I, too, congratulate my noble friend Lord Wallace on initiating this timely debate and on the quality of his introductory speech. The present state of British parliamentary democracy and the role of citizens raise grave concerns; if current trends continue, as seems most likely, the future is indeed bleak. I shall focus, more prosaically, on the relations between the citizens and the state.
	As the noble Lord, Lord Wallace, observed, it is now commonplace that the electorate show increasing disenchantment with the formal institutions of democracy, especially Parliament and local government, and with those who serve them. Equally, that is reflected in the public's continuing withdrawal from joining political parties. This disdain for the business of Parliament and politicians seems to be gaining pace. It does not mean, however, that there is any apparent decline in the public's interest in specific issues. As the forthcoming report from the Power inquiry of the noble Baroness, Lady Kennedy of The Shaws, will show, the public may shun Westminster, town halls and all their works, but they are far from apathetic.
	The new technology of mobile phones and e-mails has opened up new avenues for political communication and, in the case of many issues, has a greater impact on public knowledge, perceptions and participation than that of the traditional media—newspapers and television. If 1959 was regarded as the first television-dominated general election, 2008 or 2009 may be recognised as the first iPod one, or whatever invention may have succeeded it by then.
	All of that makes it harder for political parties and governments, once elected, to mobilise public support and participation, and even harder to sustain it. If social change and the weakening of traditional civic organisation and social class, along with the decline of a sense of community, have resulted in the creation of an electorate characterised by the floating voter—what Sir Ivor Crewe has termed "voter dealignment"—the recent innovations in electronics have compounded the problem of engaging the attention of the public and seeking their support. That presents an enormous problem for the vitality of parliamentary democracy and the public participation that it requires from its citizens.
	These changes are far from the whole story. The popular lack of interest in Parliament reflects a stark reality; namely, that the role of Parliament is no longer as important as it once was in shaping public policy and in holding government to account. That, too, is now a commonplace observation. Power continually accretes to the Executive and has been doing so at an accelerating rate, particularly under the present Administration. The recent massive wave of terrorism legislation is one vivid example of that.
	There is a further dimension to be considered. The conduct of modern government and the practices and types of personnel involved have brought about a virtual revolution. The old formularies, conventions and principles have all but been discarded. What was proclaimed as an unwritten constitution is now an unravelled one. We have a de facto presidency, but without any of the formal checks and balances that constrain an American president. British government is now carried out by a plethora of agencies, task forces and the like that constitute what I have termed before in this House the political demi-monde. The Cabinet is now a shadow of what it once was: it is certainly not the "buckle that fastens" as Bagehot described it. The Civil Service has less influence on policy formulation and has ceded much of its traditional role to think tanks, political advisers and, not least, management consultants, whose use is increasingly widespread throughout government. The personnel of all these groups constitute what I have called before a nomenklatura.
	These developments go back a long way, but they were bolstered by the Thatcher administration, developed further by the Major government and have come to full flowering since 1997. Whatever justifications may be advanced in support of the new character of governing, there can be no doubt that the language it has evoked has seriously debased political discourse and has thereby discouraged an informed citizen. Managerialese is now the argot by which public policies are discussed. A surfeit of acronyms peppers the ugly and sterile terminology incanted so fluently by Ministers and the nomenklatura. This new idiom of governance makes intelligible argument all but impossible: it is a turn-off. The imperatives of technocracy are inimical to democratic debate. The nonsense mantra, "There is no alternative", invented by Margaret Thatcher and so enthusiastically employed by Gordon Brown when justifying his very questionable reliance on PFI and PPP schemes vividly illustrates that point.
	Democracy is certainly not an organising principle behind the contemporary pattern of government or the language that is employed. Given this situation, I wonder how schoolteachers manage to address it in the classes that they teach on citizenship. I cannot believe that it constitutes part of curriculum, given the insurmountable difficulty of defining this phenomenon. I am not surprised that the poll of the noble Lord, Lord Wallace, showed pupils to have very little knowledge of what Parliament—or central government generally—was meant to be doing.
	You cannot easily encourage people to be participative citizens of a state that is incomprehensible. One solution to revivifying our democracy and its concomitant, citizenship, is to modernise the electoral system and its concomitant, the political parties. At the moment, most people's votes do not count and they know it. Votes that influence outcomes are swing votes in marginal seats. These are easily identified and mobilised by modern election techniques. A few hundred thousand voters are the key targets, and the rest are ignored under Westminster's first-past-the-post system. That must change to a more proportional system, which enables all voters to have a voice. If such a reform includes a top-up element, as in the elections to the Scottish Parliament and the Welsh Assembly, the list of party candidates must be an open one and not closed as is now the case. Closed systems lead to charges of cronyism and serve only to put political parties in a worse position in the minds of the public.
	Political parties can and must be modernised. They are the main vehicles for citizenship participation. They are crucial to the aggregation of interests and, as such, sift through the priorities and demands of special interests. The parties languish because of the paradox that they currently face. With declining memberships, their legitimacy has lessened, yet their formal constitutional status has been enshrined in electoral law, not least in the drawing up of top-up candidate lists. As I have said, these lists must be open, and determined by primaries. Electoral reform along these lines is the best way to promote citizenship.

The Earl of Mar and Kellie: My Lords, my position is that of a Stuart-style Unionist, looking for a more Nordic Scotland, and also that of a member of the Independence Convention. I am also grateful to my noble friend for bringing forward this debate and allowing us to tackle the difficult subject of British identity and British history in the Scottish context. I hope it will be permissible to look for solutions, rather than just revisionist positions. If this were just a geographer's question, it would be quite easy to answer. If British meant only the British Isles, it could be accepted by all those who live here in this archipelago, but it does not have only that meaning. If it were used in the cultural sense, that would make it easy, too.
	It is in the political sense that "British" comes into some real difficulty. The historic political use of the word is where the difficulty lies. In 1503 it was a good move towards stability and security by King James IV to seek the hand in marriage of Margaret Tudor, thereby setting up the Union of the Crowns, which occurred some 400 years ago in 1603. I am content with the Stuart-style United Kingdom, which James VI hoped would last for ever. The resultant constitutional architecture—one Crown and three governments of international standing—is my choice for the United Kingdom's future. Perhaps my Welsh colleagues will want to modify that, and I will support them; unfortunately, their 1536 treaty with England pre-dated the Stuart era, or, at least the Stuart UK era.
	The first people to find benefit in British identity were those involved in the Plantation of Ulster at the beginning of King James's reign. When challenged by the locals as to what they, as foreigners, were doing in the province, they were able to answer that they had every right to be there, being British subjects of King James. I am obviously indebted to the late Lord Russell for that insight. I also acknowledge that the Planters' argument did not win universal approval at the time, nor has it necessarily done so since.
	It is also worth noting the resentment inherent in the Scottish psyche over the Hanoverian Settlement and the loss of statehood, enhanced by the accession of the 10 new EU members in 2004, most of whom are smaller, and all poorer, than Scotland. The current concept of the "civic Scot" is anyone who wants to live in Scotland. That civic concept could be usefully deployed in England, where the national identity still seems to be very muddled. Anyway, for the constitutional development I want to see, there is a need for clarity from the United Kingdom Government about how the necessary constitutional progress can be achieved.
	I note that the populations of Northern Ireland, Gibraltar and the Falkland Islands have all been told that their sovereignty lies solely in a referendum. That is not the case for Scotland so far. Perhaps the noble and learned Lord the Attorney-General can tell us how a Scottish referendum for full autonomy can be inaugurated. In particular, could a referendum be triggered by a petition from the people? This was attempted in 1950 in the National Covenant, with more than 1 million signatories, but it was ignored. Would it be ignored today?
	I know that my noble friend hoped that this would not become a constitutional debate, but I see no way of debating Britishness unless it can be pointed out that the concept needs to be changed before it can be accepted as neutral and wholly benevolent. The depoliticisation of Britishness will be essential. Among other things, Britishness currently means the submersion of Scotland into a United Kingdom state dominated by England itself, a medium superpower. I believe that this must come to an end. Scotland must cease to be a semi-autonomous British region with a sub-national parliament and return to being an internationally recognised state. That is quite a prescription and the medicine consequent on deciding to do it will be quite difficult, taking into account the new budget and the process of disaggregation, particularly that of the submarine base.
	On a calmer note, the people of these islands are well intermarried and socially integrated. They have the benefit of a common language, and although the Irish were discriminated against, developments in Ireland since 1922 have reversed that. Today the Irish are as liable to be admired as anything else.
	Finally, I suggest that "British" should be compared with "Scandinavian". Clearly that describes the many attributes of those who live in Norway, Sweden, Denmark, the Faroes, Iceland and, though not officially, Finland. Perhaps Scandinavia is linked by fairly similar languages. "Scandinavian" is a viable and neutral concept because no country is now dominated by another and all enjoy internationally recognised statehood—with the exception of the Faroe Islands, which have home rule. In conclusion, I believe that the Scandinavian model points out a viable route for the British as to how they might reorganise themselves and thus be at ease in the future.

Baroness Falkner of Margravine: My Lords, this fascinating debate has ranged far and wide, as one would expect given the breadth of knowledge in this House. It is a debate of contradictions in that its subject matter is at once current—we need to talk about identity and diversity in a post-7/7 world—while at the same time it has been agonised over by each generation in an ever-changing world for a very long time indeed. Many noble Lords have dwelt on the issues. The noble Baroness, Lady Massey, sees citizenship education as a collaborative approach for which the underlying purpose is to assist young people in becoming more complete humans. That is a very fine ambition indeed. The signposts towards identity suggested by the noble and right reverend Lord, Lord Carey, were ones with which Members on these Benches would agree: parliamentary democracy, the rule of law, culture, language, history and, most recently, a new emphasis on faith. We need to look at all those issues in this context.
	The noble Lord, Lord Giddens, spoke powerfully of how difficult it is to speak of Britishness as an abstract construct, and of the need to align British citizenship alongside a frank appraisal of our history as well as our ambitions for the future. My noble friend Lord Thomson brought out a long-standing commitment to the European Union, and juxtaposed it with the benefits of devolution and how that has been enriched by inward migration from abroad. The noble Lord, Lord Soley, reminded us that democracy is above all about participation and that we too often tend to treat people as spectators. He also reminded us that the history of empire must be explained in its particular, contextual setting, a point with which we agree.
	My noble friend Lady Walmsley touched with great expertise on citizenship education. She sees it as a bit of an afterthought—I agree. What is needed, as she put it, is to roll it out across subjects—to mainstream it, as the jargon would have it. Again, active participation would be much enhanced with the reduction in the voting age. My noble friend Lord Smith of Clifton spoke of the diminution of that other side of democracy, accountability. That is much diminished, which ultimately results in disengagement, where the state becomes more and more distant from the citizen. The noble Earl, Lord Mar and Kellie, brought a uniquely Scottish perspective to the debate. I should remind the House that, as Linda Colley said in her book, Britons, his ancestors were "active" Scottish citizens in the Jacobite rebellion.
	The difference in this debate is that in our time, while the issues may not be new to us, the context in which we find ourselves is much changed. This country, as the Guardian observed in producing an atlas of multicultural Britain, is undergoing a second great wave of immigration. The figures are stark. In 1997 63,000 work-permit holders and their dependants came here. By 2003 it was almost double that. Between 1991 and 2001 the UK population increased by 2.2 million, of which 1.14 million were born abroad. This was before EU enlargement in 2004, which has seen large numbers of eastern Europeans come to these shores.
	I do not come to these figures with any sense of alarm. I think that globalisation has been a force for good. I see the movement of labour as a corollary to the movement of capital and of goods. But I can understand that there is a role for the state in managing the immediate effects of that level of diversity. I will not dwell on the provision of public services, although that is a significant part of the equation. I will dwell on the role of the state in the broader question of the compatibility of what some call intrinsically British values.
	Some noble Lords will recall that only earlier this week we had a Question here in the Chamber about the fact that 20 per cent of mothers are now foreign-born. I should immediately confess that I am a mother who is foreign-born. But how foreign do you feel when you grow up with a father who fought for a British king in the Second World War, in the Indian army in distant Burma, and who was injured and mentioned in citations? How foreign do you feel when you think in the foreign language, because you learnt it at your mother's knee, or when you identify with people around you who may be racially different but are your friends and neighbours?
	My answer is that you do not feel particularly foreign at all. I reassure noble Lords that the increase in foreign-born people should not necessarily be something to worry about. In looking around the Chamber, I reckon that I have spotted at least four foreign-born people just in the debate today. This illustrates, to pick up the points made so ably by the noble Lord, Lord Desai, that identity is a multi-faceted thing. It does not necessarily have definable characteristics that politicians should agree on and roll out as a construct that we as citizens need to sign up to.
	In my first-hand experience of communities—and I have lived in seven or eight countries in the past 30 years—people evolve into their skin, in terms of character, in different ways and at different speeds. A lot of this is subliminal. Much of it can be acquired, but ultimately it comes down to belonging. Most of us seek to belong wherever we fetch up. I am not talking only of immigrants here, but of more established communities.
	That brings me to the definition of Britishness used by the Chancellor in his Fabian speech a few weeks ago. We on these Benches agree with the prioritising of liberty on his list of British values but the problem is that, if liberty is to be the linchpin of a new identity, it must be respected by government as much as by citizens. Under this Government, alas, that ancient and historic right has come under repeated threat. The list is long: the assault on civil liberties through successive terrorism legislation and law and order Bills; the attempts at curtailment of free speech through Bills such as the Racial and Religious Hatred Bill; and the explosion of new law so recently criticised by Sir Roger Toulson, chairman of the Law Commission.
	Fairness is another intrinsic value of Britishness with which we would not disagree, but, in new Labour-speak, fairness is often confused with equality—or egalitarianism, as the noble Lord, Lord Giddens, would have it. While egalitarianism is a value in itself, it is not a substitute for justice, an abiding human concern over history. In recent times that concept of justice has been somewhat tarnished in terms of our policy, where this country's record of proud internationalism has been diminished by neo-imperialistic undertakings, such as the Iraq war.
	As a Briton who has worked around the world, I find that the concept of fair play is what most people abroad think of in terms of the UK—not necessarily egalitarianism, particularly where our society has considerable economic inequality. Where clear-cut rules are absent, fair play becomes all the more important, and people know when the right outcome has emerged. The words "fair play" are so much an English virtue that they have been incorporated into the German language, which has no comparable words. To Germans, the phrase describes decent behaviour while engaging in competition, be it in financial markets or on the sports ground.
	While most of us would agree with many of the values described by the Chancellor, the central difficulty of this endeavour is that a sense of identity is something so nebulous that it cannot be defined by the state, beyond the wide parameters of a nationalistic discourse. As individuals, we are often the product of where we come from. Our identity evolves in subtle and complex ways, although we imbibe and retain values that are common, yet at the same time distinct from others. That is right, and, unless it conflicts with the rights of others, it is nothing we should seek to mould into a more uniform cultural construct. However, as the noble Baronesses, Lady Young and Lady Howell, so powerfully pointed out, the state should not stand by in the face of discrimination, which has been, and still is, the experience of some ethnic minority communities in this country.
	To end on a positive note, that same Guardian atlas of multicultural Britain made the point that while we are absorbing more people from every part of the world, our attitudes to that have changed sufficiently, 50 years on, that this change is met with no outcry or rise in racism, but on the whole with a mature acceptance of a new context. This is the epitome of what self-confident societies should be, and what Britain can do when she is at her best.

Lord Howell of Guildford: My Lords, I join others in thanking the noble Lord, Lord Wallace of Saltaire, for initiating this debate, although I confess that I looked forward to the occasion without much enthusiasm. That is partly because I always found citizenship a paralysingly boring subject at school—that was probably because it was badly taught—and I much preferred history, and partly because I agree with the noble Lord, Lord Giddens, that one does not feel very warm towards the concept of Britishness. One feels even cooler towards the current trendy obsession with the subject, as instanced by diverse conferences organised by think-tanks, BBC producers, and the faintly absurd and patronising comments made by the Chancellor of the Exchequer the other day.
	The act of being concerned with Britishness is quite a shallow business. The noble Lord, Lord Desai, made that point very clearly. It is also rather an offshore subject in the sense that it is an idea that is vigorously discussed outside this country, and is a silhouette visible or interesting only when seen from afar and in comparison with other nations' cultures and customs. In short, it is amusing to discuss on the cosy overseas weekend conference circuit, but I do not believe that it is a serious subject to which we should give very much time here.
	Having made those rather unhelpful remarks, I acknowledge that we have a debate, and I want to add a few thoughts to it. First, surely the most obvious symbol of our country, nationhood and character is where we are now standing and sitting—our Parliament. If we want to concentrate on the health and cohesion of our country—it is perfectly reasonable that we should be concerned by it—we could do no better than put Parliament, and the respect that it commands and ought to command, at the centre of our efforts. It is interesting also—this has come up in your Lordships' debate—that we still have to decide as a nation, and, indeed, as a Parliament, whether we are a Parliament of the Union in a unitary state or a Parliament within a federal, devolved kingdom. The issue has not been worked out yet. Some people may think that it is manageable, but the rumbling and continuing West Lothian question tells us that it has not been resolved. In due course that issue will explode at a certain point in our future political history, and it will be interesting to see how we all deal with it.
	Pollsters tell us that there has been a huge decline in public trust in Parliament. However, that is a suspect conclusion. I sense that the noble Lord, Lord Smith, said that as well. The decline may certainly apply to politicians, parties, governments, TV interviewers and the like, but I still insist on believing—I have seen no evidence to the contrary—that Parliament is loved and respected by the British, not least because, for all its unfortunate moments, it works rather well. It works rather well because we have two Chambers, one entirely democratically elected—sometimes it is magnificent and there are some golden and brilliant moments in the other place, but inevitably it is highly vulnerable to all the short-term fashions, fears, panics and impulses of a popular assembly. The other Chamber is a most successful cooling Chamber that can insist on second thoughts and delays, and does, as recent days have shown all too clearly.
	I do not want, any more than anyone else, to turn this into yet another debate on Lords reform or the constitution, so let me pass from those thoughts to a second subject. It is one that invariably comes up when questions of national identity are discussed and when Britishness is on the menu; that is, immigration and the fear that the whole concept of Britishness has been or could be captured by the far Right and the flag-waving insular mentality. In fact we are all immigrants. Britain today has been made almost throughout its history by wave after wave of immigrant peoples—Saxons, Danes, Norse, Norman, Mediterranean, Irish, French, Spanish, Huguenots, Jews, Muslims, Indians and Pakistanis.
	We are a nation of immigrants and we have largely imported tastes, as the noble Baroness, Lady Young, reminded us in her marvellous speech. Some historians like romanticising the Celts, the pure Brits supposed to have been here before the Romans came. I suspect this is probably mythology put together around the beginning of the 19th century, when Napoleon was the enemy and the thought that we might all have been originally French or Norman was too awful to contemplate. We could not bear the idea that history began in 1066, so we invented a lot of stuff before that. The heart of the matter is that Britain has always been a melting pot. We are not a narrow racial group, and I suspect that the melting-pot character is the source from which much of our so-called national character comes, and certainly much of our dynamism—which, when we care to mobilise it, is considerable.
	The issue of melting pots leads to another issue which has again come up in the debate—multiculturalism, which has been a bit of a fashion and much taken up by Ministers. In my view, this was wrong-headed thinking from the start and it has been rightly panned. I strongly agree with Trevor Phillips, chair of the Commission for Racial Equality, that this kind of thinking leads not to cohesion, national unity and a sense of community, but to isolation, alienation and even hostile communities. The prospect always seemed ridiculous that people welcomed into our country, whom we wished to live with and to be at ease, should not adapt to the country. It was a simplistic proposition and bound not to bring cultures together but to set them on conflicting paths. To some extent that is what it has done, and we have heard instances of that this afternoon.
	The trend was worsened, not helped, by one of the conclusions of the Parekh report. Here I am afraid I disagree with the noble Baroness, Lady Young, though I agreed with everything else that she said. I read the report extremely carefully several times, and it comes near to arguing that Britain itself was a racist concept. That view showed a worrying ignorance of the true melting-pot nature of first England and later Britain from its earliest existence.
	Finally, there is my most deep-felt and important proposition in this whole sphere. Quite simply, a nation's internal health, cohesion and its sense of purpose are largely determined by that nation's external stance, by its international status and the way it defines, protects and promotes its interests and interprets them. In other words, a clear exposition of our foreign policy purposes helps us mightily to define ourselves within. I feel this so strongly that I recently had the temerity to publish a pamphlet on these matters, which nobody took the slightest notice of. In that pamphlet I tried to explain why I am far from satisfied that Britain's foreign policy today fulfils these essential conditions. Those who want to subcontract our foreign policy, for instance to the European Union, do not begin to understand this point. On the contrary, the belief that our foreign policy is about "working with our European partners"—the sort of mantra of the Foreign and Commonwealth Office—leads up highly negative avenues. If there is to be a loyalty and pride for this country from all the groups and minorities within it, Britain must be a cause worth loving, respecting and working for.
	Everyone has a need to have a country and to love it, however unfashionable it may have been to say so in recent years. People, like plants, need soil in which to send down their roots. Those who say we can all do nowadays without a country or content ourselves with trendy notions of the post-modern state, the international community or even some higher European loyalty, are just mistaken. Love of country is not a vague principle—it is an everyday necessity.
	Of course we need lots of partners; it is a totally interdependent world. For me, "sovereignty and independent foreign policy" does not mean very much at all. Are our European neighbours the right partners? I cannot understand why we do not place our Commonwealth connections much more at the centre of our foreign policy, not least because the Commonwealth now contains several of the world's richest and most dynamic and fast-rising countries. Nothing would do more to bind in and encourage the Commonwealth within—I mean the internal microcosm of the Commonwealth inside our nation—than to recognise that fact.
	If we want our country to be strong and unified, and if we want a growing sense of pride in what Britain can do to help the world and of pride in our national story, planting Union Jacks in the garden is frankly not the answer. The answer is to replace our enfeebled foreign policy with one that people admire, with which they can identify, and which lets them feel that we are making our maximum contribution to the stability and prosperity of the globe. If we must talk about Britishness and identity, that is the way, above all, to provide it.

Lord Goldsmith: My Lords, it has been a privilege to listen to this debate. I congratulate the noble Lord, Lord Wallace of Saltaire, on initiating it and all other noble Lords who have spoken. This debate will very much merit rereading. I will come back at the end of my observations to the particular suggestion that the noble Lord, Lord Wallace, made about how we might take these issues forward, because they are important. They are not straightforward, and the different slants which noble Lords have brought to this debate and the different aspects which have seemed important to the speakers are an indication of the difficulties.
	The debate has been wide-ranging; sometimes it has been a bit further ranging than I am personally prepared to go. The noble Lord, Lord Smith of Clifton, raised some important issues about democracy and the state of governance. He will not be surprised to hear that I disagreed profoundly with much of what he said, but they were interesting observations. The noble Earl gave us an important set of questions to do with Scotland that were soundly based in history, but they raise spectres for the future that I am certainly not prepared to envisage just at the moment. I will leave those alone for the moment. If not unanimity, there was a wide degree of consensus on a number of the issues that have been raised this afternoon. If anything, the debate has been broadly characterised by a consensus approach, although that is not entirely true of what the noble Lord, Lord Wallace, said in opening. I very much agree with what my noble friend Lord Soley said about the Respect Action Plan. He made one or two other sideswipes against new Labour; at least he levelled those with a sideswipe or two against the Conservatives as well, so honours are even in that respect.
	What did we see by way of consensus? We saw quite a wide consensus that whatever Britishness means it is not about narrow national origins. The noble Lord, Lord Thomson, made it very clear that one can be both Scottish and British; Welsh and British; or Cornish, English and British, as my right honourable friend the Chancellor of the Exchequer said. I hope I am right in understanding that that is what my noble friend Lord Giddens was getting at when he said that talking about Britishness might be part of the problem. One should perhaps be looking more at what the essence of being British is, rather than some other concept. I will come back to that too.
	We also had consensus in the House on the importance of recognising that if tolerance and inclusiveness are part of the hallmarks of being British today, that has sadly not always been the case. The noble Baroness, Lady Young of Hornsey, made that clear. My noble friend Lady Howells, in a moving and sobering address, made that extremely clear as well. The noble Lord, Lord Desai, may have been lucky to feel the way he did when he first came to this country. There are, therefore, important issues of what multiculturalism means.
	There has been a degree of consensus that being British is not simply about symbols or institutions, still less about institutions that are unchanged and unchangeable. That is not to deny, contrary to the view expressed by the noble Lord, Lord Howell of Guildford, that there may still be importance and merit in the recognition of symbols as a part of British identity.
	There has been a wide measure of agreement, if not consensus, that when we look at what we mean by being British and by citizenship, we are looking for something to do with the relationship of people to one another. When my noble friend Lady Massey made that point it received wide support throughout the House and I very much agree with her. Another important issue is the fact that there may be elements of faith in this area. It was good that the noble and right reverend Lord, Lord Carey, was able to participate in this debate. I am not sure that I agree with him that complaining is the best indication of British identity, if that is what his amusing anecdote was designed to mean—but I am sure that it was not.
	Has there also been a consensus in the debate that government have a role to play in promoting citizenship? I believe that that is what noble Lords have largely said. The noble Lord, Lord Howell of Guildford, takes a different view about the significance of being British. I hope he will forgive me if I point out that the view he expressed was not the same as that expressed by the leader of his party, who in a recent speech asking whether Britishness matters said that it used to be unfashionable to say so, but now he believed it was right to say so. Well, this is not the House in which one draws attention to changes in policy, nor asks what happened to the proposition that there was not such a thing as society.
	I turn to what the Government believe is their responsibility to promote citizenship and what they have been doing. An important starting point is that we are proud of today's multicultural society. I agree with the noble Lord, Lord Howell of Guildford, that it would be wrong to see this country as having a narrow, single racial base. He is absolutely right on that. We also believe strongly in building a society with opportunities for all. Equality is important and equality of opportunity is important. It is now just over a year since we published the Government's strategy to improve race equality and build community cohesion—Improving Opportunity, Strengthening Society— which brings together practical measures across government to improve opportunities for all in Britain, helping to ensure that a person's ethnicity and race are not barriers to their success.
	Against that background, we must look to where concepts of citizenship and belonging fit. National cohesion will depend upon a sense of inclusiveness in the concept of Britishness, something which is accessible to everyone in our society and encourages each individual to play his or her part and to respect others. It rests with all citizens, both children and adults and both new and existing citizens. With that in mind, our strategy has been to look at each of those strands. For example, to achieve the goal of a cohesive Britain it is vital that young people from different communities grow up with a sense of common belonging. We must improve opportunities for young people from all backgrounds to learn and socialise together to develop an inclusive sense of British identity alongside their other cultural identities. That is why the programme of citizenship as a statutory subject in all schools is important. My noble friend Lady Massey and the noble Baroness, Lady Walmsley, referred to that and gave accurate descriptions of the Government's programme. When one looks at the criticisms of where the programme has got, it is right to remember that this is the first time and these are early days. All pupils will be taught about the diversity of national, regional, religious and ethnic identities; the need for mutual respect and understanding; and the other areas to which both noble Baronesses referred.
	The Government are conscious of the concerns that have been expressed about how well the subject is being taught. We take those very seriously and measures are being taken to address them. We want to improve the cadre of specialist teachers for citizenship. The measures include increasing the number of places available this year on the training programme for specialist citizenship teachers and a major initiative launched by the Department for Education and Skills on promoting professional development activities in citizenship education—including a new citizenship handbook, a pilot for a CPD certificate in citizenship teaching and a school self-evaluation tool. I will certainly ensure that the points made by both noble Baronesses and others are brought to the attention of my colleagues in the DfES. I am sure that they will confirm that we are strongly committed to making this work and that measures are in place to do that.
	I should like to touch again on the issue of the Respect Action Plan. I do not agree with the observations made by the noble Lord, Lord Wallace. The Respect Action Plan is only part of the Government's overall package. However, what does the plan do? It includes a concentration on parenting and helping with parenting. I agree with the noble Lord, Lord Soley; that that is extremely important if we want to bring up children who respect these values and other citizens. It gives local communities new powers—the power to trigger action so that they can take responsibility for their own communities. It includes taking pride in local communities. Those are important aspects of citizenship, as are the powers which are taken to deal with those who break the rules that all of us need to respect.
	We also believe that promoting citizenship in all its aspects does not stop when someone leaves full-time education. That is why we are also piloting Active Learning for Active Citizenship, an action research programme which runs until March of this year. The Government are serious about it. The present scheme is enabling groups excluded from public life to learn how to make their presence felt. The West Midlands Women Impact Group and the Exeter Support for People with Learning Disabilities are just two examples of organisations which have benefited from the pilot. A longer-term concrete product of the programme will be the development and publication, in June 2006, of a national learning framework for active learning for active citizenship which we believe will provide practical guidance aimed at providers, funders and potential learners. I agree with the comments made on the importance of participation in both these areas. The Government accept and agree with that.
	I turn from the education of those already settled in the United Kingdom to say a word about what is being done to encourage the integration of new citizens—a topic touched on by a number of noble Lords—so that they can make an active contribution to British society from the outset.
	We need to develop a society in which people feel welcome. We therefore need to define it by a spirit of mutual understanding and accommodation where there are clear expectations of all citizens, residents old and new. We therefore also need to equip newcomers with the skills they need to make their contribution, culturally and economically. That is why the Government have been promoting a sense of civic citizenship in new migrants through their two-part strategy: the language and citizenship knowledge for new citizens alongside citizenship ceremonies for immigrants granted British citizenship. Noble Lords have not said a great deal about the language and knowledge tests although the subject has been touched on in Questions in the House before. It is hoped that this will help to equip migrants with the information they need to become full and active participants in United Kingdom society. We are not complacent. We will do everything we can to ensure that the tests and the learning behind them meet their combined objectives of not being too onerous and not providing unnecessary obstacles while providing meaningful proof that applicants have made a genuine effort to become aware of UK society.
	I strongly support citizenship ceremonies. I heard what noble Lords said about them. I first saw a citizenship ceremony in the United Sates a few years ago and was deeply moved by watching people take the oath. I was particularly moved by the fact that they were being watched by their families, who were so proud to see the achievement. I welcome the introduction of something along the same lines over here. That is being done by treating ceremonies as both family and community occasions. Local authorities are being encouraged to consider how they can include local flavour in the ceremonies by inviting local community and cultural groups and local dignitaries—people of importance in the community—to participate in the ceremonies.
	For the same reason, we have piloted "Citizens' Day" in four areas. That is part of a pledge originally outlined in Improving Opportunity, Strengthening Society. Many "Citizens' Day" events focused on volunteering as a key theme, which brings me to a further reason for our interest in citizenship which has been touched on in this debate—the link between the promotion of citizenship and active democratic participation. One of the key programmes is "Together We Can", the Government's action plan for civil renewal launched in June 2005. I invite attention to that programme. It sits alongside the respect agenda and is part of the programme for placing the responsibility on every citizen to behave in a respectful way and to support the community around them in doing the same.
	It is clear that citizenship is not only about developing a programme of education for young people and adults, although that is key to our approach, but is much broader than that. Today there has been a degree of consensus, if not unanimity, that we look to find a sense of Britishness and British identity more in shared values than in narrow national origins or geographical origins or even particular institutions. That was the thrust of the important speech by my right honourable friend the Chancellor of the Exchequer which looked at whether there is a common vision and sense of belonging for all communities. That vision is defined by common opportunities and mutual expectations of all citizens.
	The challenge facing us is how to consider Britishness and citizenship in a way that encompasses the collective contribution that diverse communities make to the country. It is fundamentally important that citizens should not need to choose between their British identity and other cultural identities but that they can and should be proud of both—or perhaps even all three in the case of the Cornish example that I gave before. I hope that my noble friend Lady Howells of St Davids will find that that commitment and that view are a satisfactory answer to her probing question at the end of her important contribution.
	The Life in the United Kingdom Advisory Group said:
	"To be British seems to us that we respect the laws, the democratic political structures, and give our allegiance to the state in return for its protection. To be British is to respect those over-arching specific institutions, values and beliefs that bind us all, the different nations and cultures together in peace and in a legal order. To be British does not mean assimilation into common culture so that original identities are lost".
	We have not had unanimity today about exactly what all those elements are. I think, with respect, that the issue is much broader than foreign policy. The noble Baroness, Lady Falkner, will not be surprised to hear that I profoundly disagreed with some of her opening and middle remarks. We have previously debated certain aspects of our foreign policy and whether the Government are striking the right balance between national security, freedom for all citizens and the civil liberties of others, and I am not going to go back into that today.
	I believe that there is a role for government, but it is not for government alone, to find what Britishness is and to promote citizenship. That needs to be done through discussions, debates and action in schools, educational institutions and communities of all sorts across the country. Citizenship and civic participation must be at the heart of that debate. That is why I welcomed the main thrust of what the noble Lord, Lord Wallace, said in a very powerful speech on seeking a constructive cross-party approach to these issues. He referred particularly to a sessional committee of this House, but there may well be other suggestions. I invite him perhaps to formulate his ideas a little further and I will ensure that they are considered. I recognise, as the noble Lord, Lord Howell, and others have said, that groups, think-tanks and others have touched on the subject. We need to look to see that we can do something that adds value to the debate. I welcome the suggestion and look forward to considering further details.

Lord Wallace of Saltaire: My Lords, I thank all those who contributed to the debate and in particular the Attorney-General for a thoughtful and constructive response. We all have our own partisan and personal differences on this subject but we nevertheless have to try to find common ground. The purpose of the debate was to take up what has been said in a number of speeches, including what I regard as the Chancellor of the Exchequer's very useful and substantial speeches, which have said that we should be looking for a cross-party consensus. I am happy to think further on how best we might achieve it, either through a sessional committee or through some other means. I think that we need to take the matter further.
	I say to the noble Lord, Lord Howell, and the Conservative Party that I regret that we did not have much Conservative participation in the debate. I found David Cameron's speech very much less substantial than what the Chancellor of the Exchequer has said. The Conservative Party has some confusion about whether it is an English party or a United Kingdom party. Its foreign policy is desperately confused about Britain and Europe. I recall the Chancellor of the Exchequer saying that part of the problem about being confused about Britishness is that we are therefore confused about our relationship with Europe. We hear from the Conservative Party much confusion about whether one should allow the flying of only one flag or of several in Britain. So there are a lot of issues that we all need to discuss.
	However, without being in any sense more partisan, I return to where I started. We need to find common ground among all parties and none and among all members of our diverse national community. Let us talk on that front. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

Community Benefit Societies (Restriction on Use of Assets) Regulations 2006

Lord McKenzie of Luton: rose to move, That the draft regulations laid before the House on 12 December 2005 be approved [14th Report from the Joint Committee].

Lord McKenzie of Luton: My Lords, before I speak to the regulations and to the order, perhaps I may take the opportunity to welcome the noble Lord, Lord Howard of Rising, to what I understand is his first appearance on the opposition Front Bench. I have had the opportunity to hear him speak in the Chamber in robust and committed terms and wish him well in his new position.
	I am pleased to be able to introduce today two pieces of legislation that aim to improve the position of Industrial and Provident Societies—or IPSs, as they are known to the substantial numbers who participate in or benefit from their activities. Both measures—the Friendly and Industrial and Provident Societies Act 1968 (Audit Exemption) (Amendment) Order 2006 and the Community Benefit Societies (Restriction on Use of Assets) Regulations 2006—represent important steps forward in modernising IPS law. They follow a key consultation document, published in July 2004, which demonstrated support for the proposals enshrined in both of those instruments.
	Before I describe what these specific measures achieve, I should like first to say a few words about the importance of IPSs. As noble Lords will know, there are two types: the co-operative, which is run exclusively by and for the benefit of members; and the community benefit society, which is run by its members for the benefit of the wider community. The Government welcome the significant role that societies of both types play in providing greater choice and diversity in the wider economy and for the public in general. We welcome the tradition of democratic involvement and member engagement that many of those societies represent and admire how the co-operative movement has been changing and transforming itself into a modern business framework to meet the needs of community engagement and sustainable enterprise for the 21st century.
	We also welcome the recent trend for IPSs to deliver local services in areas such as leisure, football supporters' trusts and childcare. The Government have been encouraged by recent developments in the sector and we are keen to see IPSs continue to grow and flourish. As part of our commitment to that process, we are looking to reform provisions in current legislation, where that is appropriate and necessary. This is why we have supported two Private Members' Bills in recent years which had the objective of modernising IPS law. In 2002, we backed a Bill that eventually became the Industrial and Provident Societies Act 2002. A year later, we supported a further Bill, which became the Co-operatives and Community Benefit Societies Act 2003. These two statutory instruments further develop the sector. I hope noble Lords will agree that those actions, taken together, demonstrate a level of interest in and support for IPSs that is unprecedented in recent decades.
	We are supporting them not just because of the general importance of IPSs but because of the need to ensure a broad equivalence of treatment—or parity—between IPSs and companies. That is because we recognise that many in the sector believe that IPS law is becoming outdated in a number of ways. For example, I know that many involved with IPSs have been particularly concerned about their relationship to a new legal entity: the community interest company. That was established by the Companies (Audit, Investigations and Community Enterprise) Act 2004 and the Community Interest Company Regulations 2005, using, as their basis, a variant of company law to provide a vehicle for pursuing social enterprise goals. The social enterprise sector is diverse and the Government acknowledge the need for a range of different legal forms to sustain it. Alongside IPSs, the community interest company will offer greater choice and opportunity for social entrepreneurs. But the introduction of that new legal form most certainly does not mean that the Government intend to leave IPSs to wither on the vine—not least because the IPS tradition of democratic member engagement is particularly appropriate to those forms of social enterprise where stakeholder involvement is key. The two instruments that I am laying today provide further testimony that we see a continuing role for IPSs.
	I now turn to the instruments in more detail. The first will give community benefit societies the option to apply a lock on the value of their assets. That asset lock aims to allow community benefit societies to close off the possibility that assets accumulated during their lifetime for the benefit of the community might be distributed to private individuals, following a vote on conversion to a company. The instrument requires that where that option is taken up, a society's locked assets must be transferred to another body with an equivalent asset lock, should the original society convert.
	The aim of this proposal is to provide members with the certainty that their investments will be used for the benefit of the community—a certainty that should serve to promote the growth of the community benefit sector. This is particularly important because the community interest company, which I mentioned earlier, already has an asset lock built into its legal form. So unless action is taken to allow community benefit societies a similar option, those wishing to invest for the benefit of the community may well turn to community interest companies instead. This instrument takes another important step towards ensuring a level playing field between societies and other bodies.
	Respondents broadly agreed with the proposals following the consultation document published last July. Two of the key issues in the consultation document were which community benefit societies should be allowed to apply an asset lock and how the asset lock should be regulated. As to the first, we propose to exclude registered social landlords who have incorporated as IPSs, as well as charitable industrial and provident societies. This is because both types of community benefit societies are already subject to restrictions on the use of their assets through compliance with housing law and charitable law respectively. Consultation respondents broadly agreed that allowing these types of bodies also to apply the asset lock that is being introduced today would lead to unnecessary confusion and duplication.
	As to how the asset lock should be regulated, consultation respondents were asked to consider whether a light-touch approach or a more rigid framework was more appropriate. There was a clear preference for a light touch, and the Government agree that this is the more sensible way forward. Given both the democratic ethos inherent in community benefit societies and the fact that these bodies are traditionally closer to their members than proprietary companies, we believe that members will be well placed to ensure that locked assets are used appropriately. Putting in force a more rigid framework might also impose costs and burdens which relatively small community bodies would struggle to meet. One consultation respondent described the light-touch approach as a "sensible, practical, democratic method", which is a view that we are happy to accept.
	However, we have put in place a number of measures to ensure that sufficient deterrents to the misuse of locked assets are in force. The Financial Services Authority, which currently registers industrial and provident societies, has agreed to take on responsibility for overseeing this light-touch approach. Where a community benefit society is considered to be in breach of these asset-lock regulations, we have given the FSA the power to require the society to take all necessary steps to bring that contravention to an end by the issue of an enforcement notice, which is in effect a cessation order. Where an officer of a society has knowingly contravened the regulations, the FSA may require that officer to make restitution to the society. Naturally, I do not expect the FSA to make use of these powers at all frequently, but a deterrent is important, and these measures provide an effective response to any wrongdoing on the part of a society or its officers.
	We have worked closely with the FSA on these proposals, and I thank its officials for the help that they have given us. I also thank Co-operatives UK for its help during and since the consultation to ensure that these draft regulations meet the needs of benefit and community societies. These regulations are made under the Co-operatives and Community Benefit Societies Act 2003 and amend the Industrial and Provident Societies Act 1965. They are divided into five main parts. Part 1 provides the citation, commencement and interpretation provisions. Parts 2 and 3 set out how the restriction on the use of assets will apply and how they may be used. Part 4 sets out the enforcement measures, and Part 5 sets out the miscellaneous and supplemental matters.
	In more detail, Regulations 3 and 7 set out the purposes for which a society's assets may be used. Regulation 4 and Schedule 1 set out the terms of the "restriction on use" rule, as it is called. Regulation 5 defines the kinds of community benefit society that may have a restriction on use; housing associations and charities already have a restriction and are therefore excluded from these regulations. Regulation 6 provides that the restriction is unalterable, except in certain prescribed circumstances. Regulations 8 to 15 set out the enforcement measures. Regulation 8 requires that enforcement measures should be taken only to the extent necessary to maintain confidence in community benefit societies.
	Under Regulation 9, the Financial Services Authority may enforce a restriction on use by issuing an enforcement notice requiring a society to take the necessary steps to ensure that any breach is brought to an end or is not repeated. Under Regulations 10 and 11, an officer of the society who has knowingly breached the regulations can be required to make restitution. The officer may also be removed from their post. Provision is made for warning notices under Regulation 12, decision notices under Regulation 13 and for appeals under Regulation 14.
	Additionally, under Regulation 15 the Financial Services Authority may apply to the court for an order restraining a breach of the "restriction on use" and directing an officer of the society to take steps to prevent, or bring to an end, any contravention. Regulations 16 and 17 in Part 5 set out the requirements for the service of notices and together with Schedule 2 set out the modifications to the Industrial and Provident Societies Act 1965.
	I will now turn to the second of these instruments, which raises the audit threshold for both charitable and non-charitable IPSs. At the moment, the Friendly and Industrial and Provident Societies Act 1968 generally requires societies to appoint a qualified auditor to audit their end-year accounts and balance sheet. But non-charitable societies can choose to disapply this obligation if their turnover is below £350,000 and their balance sheet total is less than £1.4 million.
	There are two reasons why we may wish to raise both of these thresholds. First, the audit threshold for companies is significantly higher and was raised recently by the Companies Act 1985 (Accounts of Small and Medium-Sized Enterprises and Audit Exemption) (Amendment) Regulations 2004 (SI 2004/16). Taking action here will create a more level playing field by ensuring that smaller IPSs are not required to pay more in auditing fees than equivalent-sized companies.
	Secondly, the Charities Bill currently in another place may further increase dis-equality. The Charities Bill will see the auditing threshold raised for all charitable entities, including charitable companies and societies. It would be odd for non-charitable IPSs to be given less regulatory flexibility than charitable societies in this area. The current proposals will not only bring the thresholds in line with companies, but will also provide a degree of future proofing. There is a good case for raising the audit threshold for non-charitable societies so that it becomes—and stays—higher than that for charitable societies.
	This raising of the audit threshold for non-charitable societies will mean that IPSs should be able to save significant costs. A regulatory impact assessment estimated savings for an individual society of around £2,000, which, across the whole sector, could mean as much as £2.4 million being saved. IPSs that wish to continue to have their accounts audited, for example, as a way of enhancing their reputation and reassuring investors, will, of course, continue to be able to do so. But those that wish to put the potential savings to other uses—in the same way that smaller companies can—will now be free to opt for that course instead. The Treasury consulted on this proposal in July 2004 and I am pleased to say that there was near unanimous support for raising the threshold. Respondents clearly agreed that a level playing field is both appropriate and desirable in this area.
	I will now go through the statutory instrument itself. As noble Lords will see, it uses for the first time what has become known in the sector as the Gareth Thomas power by amending IPS law in line with and following a change in company law. This power was given by the Industrial and Provident Societies Act 2002, which I mentioned earlier.
	The order amends the Friendly and Industrial and Provident Societies Act 1968 in as much as it sets out the conditions which must be satisfied for a society to disapply Section 4 of that Act. Section 4 imposes a duty on a society to appoint a qualified auditor to audit its accounts. Article 2 of the order provides that, for a society to be able to disapply Section 4, its assets must not exceed £2.8 million—instead of £1.4 million—and its turnover must not exceed £5.6 million—instead of £350,000. Article 3 provides for the amendments to have effect in relation to any year of account ending two months or more after the coming into force of this order. Copies of the consultation document on these instruments, the summary of responses and the regulatory impact assessments are available on the Treasury's website.
	Looking forward, the Government will continue to work with the sector to enable IPSs to fulfil their potential. But to provide for a more strategic and co-ordinated approach, we plan to wait until the major overhaul of company law that is currently in train has been completed before considering whether further action needs to be taken on IPS law. This will enable us to consider what, if any, further steps need to be taken to maintain the more level playing field between IPSs and companies, which the measures we have been discussing today have been designed, in part, to achieve. It will also provide stability, something that is particularly important to smaller societies, which may not have the resources to deal with ongoing legal change. But in the short term, I hope that we can agree that much has been done already and much is being done now. We have taken significant steps forward in updating IPS law. I hope that those in this House who recognise the importance of the contribution that mutuals make to this country will welcome these proposals. I beg to move.
	Moved, That the draft regulations laid before the House on 12 December be approved [14th Report from the Joint Committee].—(Lord McKenzie of Luton.)

Lord Howard of Rising: My Lords, I thank the Minister for his kind remarks and for easing my debut on this occasion. I thank him for the introduction of the regulations and the order, with which we on these Benches broadly agree. The support of community and friendly societies is to be welcomed. No doubt the ability to restrict assets to the purpose for which they were intended could be helpful in attracting new members.
	Will the Minister please clarify whether the asset lock is reversible should there be a genuine and overwhelming wish on the part of the members so to do? The Financial Services Authority already has many responsibilities. It is to be hoped that it will take the necessary time and trouble to create regulations for this sector which are simple and easy both to understand and to operate; a light-handed approach rather than overkill. The Financial Services Authority has also been given powers to impose penalties in the event of breaches of regulations. Does the Minister think it is wise to give the FSA a free hand when some argue that its record in this field does not bear scrutiny?
	I am told that systems have been improved but the FSA has an unenviable reputation for imposing disproportionate fines for the most trivial offences. The Financial Services Authority disciplinary procedures have only once been examined by an outside body. That was in the matter of the Legal & General company where the Financial Services Authority's internal appeal rejected Legal & General's case. Legal & General appealed to the Financial Services Tribunal, a process available only because of an amendment introduced in this House by my noble friend Lord Saatchi. The company was shown to be substantially correct and the Financial Services Authority wrong. The costs of making an appeal of this nature would not normally be available to those looking after a community benefit society.
	With regard to the order, I agree that any step which reduces the present level of regulations is to be welcomed. However, if it is appropriate for non-charitable friendly and industrial and provident societies not to have their accounts audited when their turnover is below £5.6 million, might it be sensible for charitable friendly and industrial and provident societies and charities to have the same level of turnover below which accounts need not be audited, rather than the £500,000 proposed in the Charities Bill? I hope that the Minister can offer some answers in his response and I am pleased otherwise to agree to the two measures.

Lord Newby: My Lords, we on these Benches agree wholeheartedly with the Minister on the importance of co-operative and community benefit societies. Like him, we have watched with interest as over recent years the sector has transformed itself and is now undertaking a wide range of new activities. The original founders of the co-operative movement and the original members of community benefit societies would have been amazed at the thought of football and rugby clubs being administered under the same provisions in which they thriftily undertook their activities. But it is a sign of the flexibility of the concept that it has been able to adjust to modern times.
	Given that these co-operative and community benefit societies now see new areas of growth, it is extremely important that the legislation regulating them is appropriate and, in particular, is updated regularly. Indeed, it is noticeable that it has taken some time for these orders to come before the House. They relate to Bills which were passed in 2002–03—the asset lock mirrors the provision in the community interest company legislation—so it is a pity that the Government could not bring these provisions into force in parallel with the provisions in earlier legislation, rather than leaving it.
	I understand what the Minister has said about why the Government have decided to exclude registered social landlords from the asset lock, but I would welcome his assurance on one point. If a registered social landlord decides that it wishes to transfer its assets to a straightforward commercial landlord under existing legislation, what prevents it from doing so? As your Lordships may be aware, earlier this week in your Lordships' House, I referred to the status of some of the Octavia Hill estates in London, some of which have already been transferred to a joint venture between a commercial and a registered social landlord. It is clear that rents will rise in many cases to market levels where they were not at market level before. What was previously social housing is likely to end up within a number of years as being, in effect, not social housing. Given demand pressures on the social housing sector and incentives for any registered social landlord to sell assets, I would welcome any further underpinning of what the Minister has said about the asset lock already.
	I agree with the decision that the FSA should be the regulator. I do not know who else could logically do it. The phrase "light touch" in the same sentence as FSA causes one or two eyebrows to be raised slightly quizzically, but the FSA has attempted, against its better judgment almost, to adopt a lighter touch in recent times. On the level of fines and penalties, the noble Lord, Lord Howard, said that some people think that their fines are too onerous. Others have argued that they are not onerous enough. So this may be a case where the FSA has broadly got it right. However, given that its whole raison d'être and remit is to manage financial services providers, it is logical that it should deal with these forms of society.
	The audit order seems to be eminently reasonable. Finally, the Minister said that IPS law would be reviewed in the light of the new companies Bill. Can he assure us that that will be done speedily and—I finish as I began—that the regulations affecting these societies will be brought into line with latest practice affecting other bodies in the corporate world?

Lord McKenzie of Luton: My Lords, I am grateful for the support given to the two orders by both Benches opposite. I shall try to deal with some of the questions that have been raised. The noble Lord, Lord Howard, asked whether the asset lock is reversible. It is not. There was discussion of the FSA's role; I am pleased that we are agreed that the light touch is an appropriate way forward. The FSA has a duty to maintain confidence in community benefit societies and must exercise its powers for this purpose. It cannot impose penalties, but it can require restitution. There is an opportunity to appeal to the High Court for a decision against the FSA. The consultation that took place on a range of matters associated with these orders showed increased satisfaction with the FSA.
	The noble Lord, Lord Newby, asked specifically about RSLs, acknowledging that they are outside the asset lock provided for in these orders. I think that he was pressing for further specific detail as to the nature of the current asset lock. I cannot give the noble Lord any specific detail here and now; I know that it is an issue he has pursued in another area. They would, of course, be able to transfer assets to a community benefit society that did have an asset lock, but I cannot say to what extent they can transfer outside arrangements that have an asset lock. The import of these orders is that there are restrictions on that, otherwise it would have taken us down the path of including RSLs in the orders.
	As regards updating company law, an exercise is under way to review the amendments introduced into the Company Law Reform Bill and to identify what can usefully be used to amend IPS law using the power contained in the Industrial and Provident Societies Act 2002. It is difficult to give a commitment to a time scale, particularly having sat through two sittings only so far of the Committee stage of the Company Law Reform Bill. That itself is going to be quite an extended process. The point about the need to make progress on that is well taken.
	The issue of the different thresholds applicable—or to be applied—to audit cut-offs was raised. We obviously cannot comment on what the outcome of the Charities Bill might be; it is still going through the process. The objective is to align—as this aligns non-charitable IPSs with non-charitable companies—the charity sector so that charities are on a level playing field. At the moment there is disparity but we recognise that charities should be subject to a higher standard of audit than commercial and other societies. I think that that has long been accepted as a principle.
	I hope that that has dealt with each of the points raised. I am, again, grateful for the support given. In conclusion, these two statutory instruments take important steps forward. Not only do they contribute to creating a more level playing field between IPSs and companies but, even more important, they will enable these societies to continue to play their valuable role in our economy and society. We are keen for the sector to grow and flourish. These two instruments will help to drive that agenda forward. I commend the order to the House.

On Question, Motion agreed to.

Friendly and Industrial and Provident Societies Act 1968 (Audit Exemption) (Amendment) Order 2006

Lord McKenzie of Luton: rose to move, That the draft order laid before the House on 12 December 2005 be approved [14th Report from the Joint Committee].
	Moved accordingly, and, on Question, Motion agreed to.

European Communities (Definition of Treaties) (Cooperation Agreement between the European Community and its Member States and the Swiss Confederation to Combat Fraud) Order 2006

Lord McKenzie of Luton: rose to move, That the draft order laid before the House on 19 December 2005 be approved [14th Report from the Joint Committee].

Lord McKenzie of Luton: My Lords, I hope the House will be able to support this order so that the EU/Swiss anti-fraud agreement can be specified as a Community treaty for the purposes of the European Communities Act, so enabling its ratification by the UK. It may help noble Lords if I briefly outline the background to this order and explain why the Government consider it important that the UK ratifies the EU/Swiss anti-fraud agreement at an early date. The purpose of the agreement is to put in place judicial and administrative co-operation arrangements, including for the exchange of information, between EU member states and the Swiss Confederation. This will enable both parties to more effectively combat fraud and other illegal activities in a number of areas, including the trade in goods and services, the charging and retention of structural funds, public procurement and in respect of money laundering. Critically, it will enable the UK to co-operate with the Swiss in order to deal with trade and illegal activities that are contrary to VAT and excise legislation. It should be noted that it does not apply to direct taxes, which for the UK are covered by separate bilateral co-operation and information exchange provisions.
	When ratified and adopted, the agreement will substantially improve the existing administrative co-operation arrangements between the UK and the Swiss authorities by bringing them fully up to the level of co-operation that the UK enjoys with other EU member states. It also introduces EU standards of judicial co-operation with Switzerland, enabling us to more successfully investigate and prosecute major frauds. I should add that this Government led the way in seeking an EC negotiated settlement with the Swiss. By working with our EU partners, we have been able to secure a much better agreement than might otherwise have been the case.
	I draw your Lordships' attention to why I particularly welcome the agreement and consider that its ratification would be of benefit and value to the UK. Noble Lords may be aware that the UK has suffered considerably from attacks on the VAT system by carousel and missing trader intra-community—MTIC—fraud in high-value goods such as mobile telephones and computer chips. Because of the multinational dimension of this type of fraud, effective arrangements for the exchange of information and judicial co-operation between countries are essential. There is evidence that criminals are now targeting their efforts towards non-EC countries because improved intervention and co-operation strategies within the EC are working.
	Switzerland, with its central geographical location and restrictive banking regulations, is seen by fraudsters as an ideal country to use as a base for their operations, or as a country through which to divert goods. A key aspect of the agreement will be that HM Revenue and Customs will be able to request information, including details of banking transactions, on the individuals who are behind the frauds but are not necessarily named as the owners of the goods in the fraud carousel. This evidence will enable substantial amounts of VAT to be withheld from the fraudsters involved. Currently it is thought that a number of Swiss-based individuals are involved in VAT MTIC fraud relating to losses in the UK. If HM Revenue and Customs can use the same investigative and intelligence tools as are currently available to tackle intra-EC fraud, we believe this could have a significant impact on these Swiss-linked frauds.
	Once it has been ratified and introduced, this agreement will significantly improve the ability of the UK authorities to make use of information held by the Swiss authorities and so enable them to more effectively fight VAT MTIC fraud as well as other indirect tax and customs frauds that cost the UK large sums of revenue. This order fulfils a necessary legal requirement before the UK can formally ratify the agreement. It is an important agreement which will greatly assist in our efforts to fight fraud. I beg to move.
	Moved, That the draft order laid before the House on 19 December 2005 be approved [14th Report from the Joint Committee].—(Lord McKenzie of Luton.)

Lord Howard of Rising: My Lords, I thank the Minister for introducing the order and for his helpful explanation. Any action to reduce fraud or to make fraud in the European Union more difficult is to be welcomed. The hour is late and I do not wish to waste the time of the House by repeating arguments already made in the other place, but I would like to make one general comment. Admirable as is the desire to prevent the perpetrators of fraud from benefiting from their actions, does not the Minister think it more important to stop the fraud in the first place?
	The European Court of Auditors has now refused to sign off the European Union's accounts for the 11th successive year. During that period, there has been much talk of the progress that is being made in cleaning up the abuse. Does the Minister agree that still to be saying that things are improving after 11 years is hopelessly inadequate? By now the accounts should be clean. No other institution, whether public or private, could get away with this sort of behaviour.
	It does not stop there. There is a record of aggression, either by intimidation or by dismissal, against employees of the European Union who draw attention to misdemeanours. If such behaviour—that is, the dismissal of employees—occurred in this country, any employer would be in the courts in no time at all. I find it incomprehensible that the Government would surrender any part of our rebate in order to swell the pool into which so many dishonest fingers are dipping. It seems to be entering the world of make-believe to permit the dishonesty but to ask if you could have the proceeds. Notwithstanding that, I welcome the order.

Lord Newby: My Lords, on these Benches we too welcome the order. I have four specific points to raise with the Minister. In terms of the fraud most likely to be caught by the order, he said that we are talking about the VAT-missing trader or carousel fraud, which has reached almost phenomenal levels. We are talking about extraordinary sums. There was a report in the press last week that the Government were considering amending the VAT accounting regime—at source, as it were—so that VAT would no longer be accountable on certain kinds of goods being imported. I wondered whether that was an idea that had any substance or whether it was just being floated by the journalist.
	When the order was debated in another place, the Paymaster-General explained that it covered only indirect taxation, because direct taxes were covered by bilateral agreements and the EU has no remit. She hoped that the UK would shortly sign a protocol with Switzerland on the taxation of savings and that this would cover much of the direct tax side where fraud might take place. Could the Minister indicate whether, when that protocol is signed, there will still be other areas of taxation—on the personal tax side, which might not technically be savings taxes—where there is no agreement with Switzerland? Is the protocol currently being negotiated one of a series or, hopefully, from the Government's point of view, would it then give comprehensive coverage?
	In the other place, they debated whether the current discussions with the Swiss on direct taxation would give UK investigators greater access to Swiss banking information. I believe that the Paymaster-General said that it would, although Swiss banks still have rules about disclosure of information that are less forthcoming than elsewhere. I wondered whether the Government felt able to persuade the Swiss to be rather more forthcoming on the information that they are prepared to make available when fraud is being alleged.
	Finally, the noble Lord, Lord Howard, on the subject of signing off the EU accounts, made the point that no other public or private body would get away with it. The Minister might correct me, but at least one British government department has not had its accounts signed off for many years. If that is the case, I would be most grateful if he could confirm it.

Lord McKenzie of Luton: My Lords, this debate has ranged wider than I assumed that it might. I will start with the point that the noble Lord, Lord Howard, made. I also thank him for his support—seemingly somewhat grudging—for this instrument.
	The noble Lord referred to fraud in the EU. This agreement is not just about VAT fraud in the UK. It covers a whole range of things which potentially affect all our partners, including the likes of charging or retention of structural funds. That is one of the key elements preventing the Court of Auditors routinely signing off the accounts. Progress is being made—the double-entry book-keeping system has apparently been a change in the system—and the UK has been at the forefront of pressing some of those developments, but I think your Lordships would agree this is not satisfactory, and more progress needs to be made. There is no doubt that this, and the access it gives to information, particularly about funds that are drifting into Swiss bank accounts, is potentially very helpful in that direction. Whatever the argument about the rebate, I do not see that it is impacted by this. So far as we are concerned, the big gain is to tackle VAT fraud, but I hope that his party is not saying that, should it come to government, it would wish to scrap the VAT system. That would be an interesting assertion and an interesting development.
	The noble Lord, Lord Newby, supports the order, and I thank him for that. He talked about changes in the VAT accounting regime. That might have been a reference to something called the reverse supply, a mechanism that may mitigate some of this fraud. I believe it was a mechanism that dealt with fraud when gold was going through similar processes, but if it is something other than that I will be happy to write to him.
	The noble Lord referred to the agreements with Switzerland and what they cover. On 31 January, HMRC announced an agreement at official level of a protocol to the 1977 UK-Swiss double tax treaty, which covers income tax, capital gains tax and corporation tax. We hope the protocol will be signed shortly and then published. It builds on the commitment on the savings directive agreement. I am not sure whether it will provide comprehensively all the flows of information we need, but it is an important step on the way. As well as this EU agreement, the continual growth of improved double tax bilateral agreements is important.
	The noble Lord asked about the issues of banking secrecy, and whether this agreement would give greater access to banking information. It will enable the UK to gain access to information on Swiss bank accounts of both intelligence and evidential use. In most indirect tax cases that is not possible. In particular, it should be noted that the contracting party to this agreement cannot invoke banking secrecy as grounds for rejecting a request for co-operation. Again, that is an important step.
	The noble Lord probed more widely about the state of audit of the UK accounts. I can say only that that is not covered by the brief I have before me. I commend this order to the House.

On Question, Motion agreed to.

Gulf War Illnesses

Lord Craig of Radley: rose to ask Her Majesty's Government what steps they have taken in response to the Independent Public Inquiry on Gulf War Illness (the Lloyd inquiry) and the Pensions Appeal Tribunal decision of 31 October.
	My Lords, I start by welcoming the Minister to the Dispatch Box, the noble Lord, Lord Drayson, being on an official visit to India. I look forward to her response. I also thank all those who will speak this evening, and those who have told me of their support but are unable to participate.
	This debate relates to the 2004 Independent Public Inquiry on Gulf War Illness and the recent findings of the Pensions Appeal Tribunal. The public inquiry was a substantial piece of work, chaired by the noble and learned Lord, Lord Lloyd of Berwick, with the able assistance of Sir Michael Davies, the previous Clerk of the Parliaments, and Dr Norman Jones, a most highly respected member of the medical profession—an alpha-plus team of expertise.
	Last month, the noble Lord, Lord Drayson, in answer to my Written Question about accepting the phrase "Gulf War syndrome" as a medical label, wrote,
	"we have welcomed the decision"—
	that is, of the Pensions Appeal Tribunal—
	"that Gulf War syndrome should now be used as an umbrella term covering any recognised medical condition caused by service and connected to the 1990–91 Gulf War".—[Official Report, 17/1/06; col. WA 100.]
	That was precisely the proposal made in the inquiry of the noble and learned Lord, Lord Lloyd, over a year earlier. I welcome the sinner that repenteth.
	As noble Lords will be aware, I was Chief of the Defence Staff throughout the first Gulf War. One of the difficult decisions that we faced was what protective measures to take when we received an updated intelligence assessment about Iraq's WMD capabilities in November 1990. I quote from the July 2004 report of the noble Lord, Lord Butler, which states that,
	"according to the new intelligence, Iraq possesses the BW agents, pneumonic plague and anthrax and has weaponised them. Weapons are ready for immediate use".
	Faced with that, it was right to take the clinical and other measures that we could to protect our personnel. Equally, having done it, the government of the day must deal with any adverse consequences of that decision. I was much encouraged by the sentiments expressed by the new Administration in 1997. Ministers stressed their sense of responsibility and their determination to do right by the veterans. The Government undertook to address Gulf veterans' concerns openly, sympathetically and seriously. An MoD paper entitled Gulf Veterans' Illnesses: A New Beginning listed 20 key points for action. Additional resources were to be made available. Fresh studies were put in hand to ensure that the MoD could respond "more urgently". It was all heady stuff. Sadly, expectations, so much aroused, grew fainter and fainter. The MoD embarked on an endless series of reviews, studies and researches. Whenever challenged to say what was happening, its response seemed to be that there had not yet been any conclusive outcome to its efforts, that further work was necessary and that millions of pounds were being spent.
	In May 2003 I took part in a Starred Question tabled by the noble Lord, Lord Morris of Manchester, on Gulf War veterans. I pay tribute to the noble Lord, who has been so energetic and resolute in his efforts to help veterans. He is a fine example to us all. I asked,
	"whether the time has not come for Her Majesty's Government to make ex gratia payments in settlement without further commitment rather than to drag out endlessly expensive litigation and inconclusive clinical trials? Surely a little magnanimity now would not only be cost-effective but would also serve to relieve the continuing anguish of veteran sufferers and their families".—[Official Report, 22/5/03; col. 935.]
	That was the principal theme in my own evidence to the inquiry of the noble and learned Lord, Lord Lloyd. It took that view to heart. The time had come to—in the inquiry's words—
	"reach agreement with the veterans".
	I was pleased to see in the response of the noble Lord, Lord Drayson, to my Written Question—which I have already mentioned—that HMG have,
	"recognised the need to bring an element of closure",
	for the veterans.
	One swallow does not make a summer. I am not sure whether "an element of closure" is just one swallow or the full flock—the full closure that we would all wish to see. I like to think that Ministers are now expressing a willingness to meet the veterans and their representatives such as the Royal British Legion, which has been so helpful and active on behalf of the veterans, to reach a final settlement of this protracted affair. But the Government must approach such a get-together in, I would hope, a rather less confrontational way than has been symptomatic—I am tempted to say "syndromatic"—of their past treatment of veterans.
	Indeed, I regret that no Minister, serving official or serving member of the Armed Forces was allowed by the MoD to appear before the inquiry. The MoD actively discouraged some individuals with experience and great knowledge of the veterans' illnesses from giving evidence. Commenting on the report of the noble and learned Lord, Lord Lloyd, during a debate in the other place, the Minister, Mr Caplin, stated that it,
	"fails to take into full account the large amount of written evidence and material provided by the MoD".
	No one should accuse this enquiry of shoddy work. In Mr Caplin's words:
	"Lord Lloyd's report does nothing to change the Government's view that an inquiry will not answer the basic question about why some Gulf veterans are ill".—[Official Report, Commons, 18/1/05; col. 238WH.]
	Surely the basic question is not that, but what to do to help those who are ill. The Minister even seemed to cast doubt on the impartiality of the inquiry because the noble and learned Lord, Lord Lloyd, was not prepared to reveal who had funded it as that was done anonymously. It is far from unusual for sponsors to wish to remain anonymous, and that wish should certainly be respected.
	Such government reactions did nothing to improve relations with the veterans and those who have been trying to help them. Will Her Majesty's Government now express their regret about the long and protracted delays over eight and a half years since this Administration came to power, and confirm their acceptance of "Gulf War syndrome" as an umbrella term covering any recognised medical condition caused by service and connected with the 1990–91 Gulf conflict? Will they make a commitment to achieve, in the course of this year, full settlement and closure of this protracted affair? As the inquiry of the noble and learned Lord, Lord Lloyd, recommends, will they provide a fund for ex gratia payments made on a pro rata basis to all who make successful claims?
	Such steps would help to heal over the many years of distress, even rejection, to which the veterans have felt so exposed. What a positive message that would send, too, to the younger generation of servicemen and women who are today exposed to danger on this country's behalf. They in time will become veterans, maybe with their own illnesses and disabilities to face. I ask Her Majesty's Government not to forget the younger generation's perceptions in their response tonight.

Lord Morris of Manchester: My Lords, my noble friend Lady Crawley can brighten any scene, no matter how low the cloud base, and I welcome her to this debate. I count this a privileged occasion, made so by an opening speech of high distinction and compelling integrity.
	The noble and gallant Lord, Lord Craig, could not be more eminently well placed to lead this debate. Chief of the Defence Staff and a member of the War Cabinet during the 1991 Gulf War, no one is better qualified to assess the value of the inquiry to whose groundbreaking report this debate calls further attention. In a letter published by the Times soon after the inquiry reported, he warmly welcomed its findings. Signed also by the noble and gallant Lord, Lord Bramall—another former Chief of the Defence Staff—and by General Sir Peter de la Billiere, who commanded British forces in the field during the conflict, the letter recalled that the Duke of Marlborough, speaking in this House after Blenheim, said the best way to celebrate that great victory was,
	"to do right by the soldiers who fought so bravely with me".
	The Times letter went on that:
	"The Lloyd report is in that proud tradition".
	So too was the speech by the noble and gallant Lord, Lord Craig, today.
	I have interests to declare in the debate—none of them pecuniary—as honorary parliamentary adviser over many years to the Royal British Legion, vice-president of the War Widows' Association, a governor of St Dunstan's, a co-opted member of the United States Congressional Committee of Inquiry into Gulf War illnesses, and the instigator of the inquiry conducted by the noble and learned Lord, Lord Lloyd of Berwick. I am grateful to him for accepting my suggestion that he should head the inquiry and for his report, one of huge importance to thousands of men and women now in broken health—many of them terminally ill—who were prepared to give their lives in the service of our country. His purpose was not to apportion blame but to end deadlock and, by unravelling the truth, to let right be done.
	I am indebted also to Sir Michael Davies, who is respected all across this House as former Clerk of the Parliaments, and to Dr Norman Jones, Emeritus Consultant Physician at St Thomas's Hospital, who sat with the noble and learned Lord, Lord Lloyd, at the inquiry and added powerfully to its impact.
	Since our first debate on the Government's reaction to the inquiry's report, which I opened some six weeks after its publication, there have been many developments, all strongly supportive of its recommendations. They include the deeply moving plea to the Prime Minister from the right reverend Prelate the Bishop of Norwich and other Church leaders in East Anglia, prompted in part by the distressing case of a parish priest there, the Reverend David Peachell, who served with such dedication as Chaplain in the Gulf War and afterwards became afflicted by multiple undiagnosed illnesses.
	Another major development was the letter sent jointly to all Scottish parliamentarians by the Right Reverend David W Lacy, Moderator of the General Assembly of the Church of Scotland, and Cardinal Keith Patrick O'Brien, the Archbishop of St Andrews and Edinburgh, calling for,
	"urgent closure of the controversy on the basis of the scrupulously fair and balanced findings of the Lloyd report".
	The letter went on:
	"This is not an issue for party animus but one on which Scotland's public representatives and churches should work together to achieve a humane settlement without further delay".
	Also important were the Pensions Appeal Tribunal's findings in the cases of Gulf veterans Daniel Martin, Mark McGreevy and Richard Hilling, which were that the Lloyd report was correct in stating that:
	"Veterans of the Gulf War later develop an excess of symptomatic ill health over and above that to be expected in the normal course of events".
	The tribunal's finding continued:
	"The term 'Gulf War Syndrome' is the appropriate medical label to be attached to the excess of symptoms and a useful umbrella term for that label. It is highly regrettable that there was such a delay in the MoD accepting this approach".
	No juggling with words can detract from the historic importance of the tribunal's decisions in the cases of Martin, McGreevy and Hilling, which so explicitly vindicated the stance taken by the noble and learned Lord, Lord Lloyd, in his report.
	Already gossamer thin, the MoD's original case for seeking to discount the Lloyd report had now shrivelled to the most immodest of fig leaves. Indeed, all it amounts to now is repetition of the words, "Gulf War Syndrome is not a discrete medical condition". Even so, that fig leaf was called into service no fewer than five times in the MoD's response to my Starred Question on 24 November 2005 and the supplementaries. Of course the Lloyd report, as noted with appreciation by the tribunal, never said that it was a discrete medical condition. On the contrary, and as the noble and learned Lord, Lord Lloyd, strongly emphasised, the use of "syndrome" in medicine,
	"does not require the features involved to be caused by a single disease. For instance, Nephrotic Syndrome is a clearly defined clinico-pathological entity, yet it has upward of 40 different causes".
	So much for the now threadbare fig leaf.
	Very clearly—in fact clarity was never clearer—the need now is for the Government to catch up with the noble and learned Lord, Lord Lloyd; Sir Michael Davies; Dr Norman Jones; the right reverend Prelate the Bishop of Norwich and his co-signatories; the Moderator of the General Assembly of the Church of Scotland; Cardinal Archbishop O'Brien; Dr Jack Melling, former chief executive at Porton Down; Dr Harcourt Concannon, president of the tribunal; and the many other distinguished figures involved in unravelling the truth in this melancholy story.
	At the very least, the Government must surely now make the tribunal's decisions known to every veteran of the conflict and act urgently, as a priority of priorities, on every case that could possibly be affected by them. After all, in the umpire's explicitly stated view, at least a year was lost by the MoD's failure to attend and give evidence to the Lloyd inquiry, and it is now 15 years since the conflict.
	What is more, the Prime Minister, in his letter of 17 October 2005 to the right reverend Prelate the Bishop of Norwich, said that the needs of veterans and their families are,
	"a top priority and always will be for this Government".
	The MoD, having accepted the tribunal's findings, but still not apologised for its strongly censured and "highly regrettable delay" in accepting the noble and learned Lord's approach, has caused profound dismay among veterans.
	The admirable Flight Lieutenant John Nichol, whose bravery under torture in Iraq was seen by television viewers across the world and who is now president of the Gulf War veterans' branch of the Royal British Legion, told the inquiry:
	"We weren't the enemy but that is exactly how Gulf veterans have been made to feel by the MoD".
	Major Christine Lloyd, a widely respected nursing officer in the conflict, who is now 80 per cent incapacitated by multiple undiagnosed illnesses and still deteriorating, told the inquiry that there had not even been anyone to say:
	"I am sorry . . . we should have believed you in the first place".
	Major Lloyd also said that it was,
	"an absolute disgrace that the MoD did not respond to the invitation to participate in the Inquiry".
	Sadly, Reverend David Peachell, whose severe disabilities were raised with the Prime Minister by the right reverend Prelate the Bishop of Norwich, has spoken even more bitterly. He said:
	"None of them are good enough to say 'sorry'. They are hoping we will die".
	These and other veterans, all highly regarded for their service in the conflict, need more now than an "element of closure". Full and final closure is their aim and an understanding in Whitehall that, if their striving for that outcome has to go on, then go on it will until right is done.
	For our part here, I suggest that we reflect that there is no higher parliamentary duty than to act justly to those prepared to lay down their lives in the service of this country and to the dependants of those who do so.

Baroness Murphy: My Lords, I am grateful to the noble and gallant Lord, Lord Craig of Radley, for providing this opportunity to ask the Government what they are doing about this important issue. It allows me to ask a number of questions about the current and future management of long-term casualties of active military engagement, especially those with persistent psychological consequences. This whole sorry saga throws an unforgiving light on attitudes in the Ministry of Defence.
	I am a psychiatrist and have had the opportunity of lengthy discussions with Professor Simon Wessely at the Institute of Psychiatry at King's College, London. He is a colleague and is the national expert in Gulf War symptoms and syndromes and, in my view, has conducted the most methodologically sound epidemiological studies of these problems.
	Let me put Gulf War syndrome in its historical context. All wars throw up clusters of symptoms in response to the stress, fear and trauma of war. Everyone has heard of shell shock, the psychological outcome of the terrible traumas of the First World War, which disabled thousands of veterans for the remainder of their lives, I am sad to say. At the time, it was attributed to the noise and concussive effect of exploding shells. Even earlier, "soldier's heart", a cluster of symptoms attributed to the pressure on the heart of the straps binding heavy equipment to the soldier, was similarly disabling after the American Civil War. Similar so-called "effort syndromes" were well described in the Crimean war and the Indian Mutiny. Vietnam gave us "Agent Orange syndrome" and a number of others—and so on.
	I remind noble Lords that psychological distress is often experienced, indeed, is usually experienced, as physical disorder—in fact, it is physical disorder. It is no good telling someone with muscle aches, pains, breathlessness, headache, severe fatigue, rashes and so on, that it is all in their heads, when it patently is not. Surely, we have learnt that much in the past 150 years. Do we have to keep repeating that because no gross physical pathology is associated with a disabling syndrome, it is not a serious illness worthy of the same level of care, treatment, support and practical help that those with obvious physical trauma expect automatically?
	Is Gulf War syndrome different from those previous well-described conflicts? Probably not, for the most part; yet there remains a degree of uncertainty over about 20 per cent of the variance of causality of these syndromes. It is important to remember that the Gulf campaign was a great military success—and a medical one. There were no deaths from environmental or infectious diseases among American or British personnel, as there of course have been in war. The military medical authorities must have ended the campaign relieved not to have had to deal with large-scale casualties and delighted with the success of their preventive measures. Yet, 15 years on, that all sounds a little hollow.
	I want to remind your Lordships of the established facts to date. UK gulf veterans experienced double the symptoms and feel worse—although physically they are still functioning fairly well, as a group—compared with non-deployed troops or those deployed in Bosnia. They had double the rate of psychiatric disorder, although that was not sufficient to explain all ill health; depression and substance misuse are in fact more common than with the usual post-traumatic stress disorder. There was certainly a reported link between the vaccines that they were given and later ill health, but that was not sufficient to explain all ill health either. Meanwhile pesticides, depleted uranium and exposure to nerve gas were never really plausible villains for UK forces.
	However, the range of symptoms is similar to unexplained civilian syndromes—such as chronic fatigue syndrome, fibromyalgia, ME, total allergy syndrome and some others. That these syndromes result from stress and the causality of the Gulf War itself cannot now be in any doubt. Why is that so, if it was not such a stressful conflict nor traumatic in the traditional sense? The report of the noble and learned Lord, Lord Lloyd, eloquently describes what probably happened, as has already been mentioned by the noble and gallant Lord, Lord Craig. The malign effects of the very fear of chemical attack—and the counter-measures put in to try and prevent it—meant that for many months in advance of the conflict men were thinking and worrying about the hazards that they would be facing. It is understandable that the impact of those imagined threats should be profound.
	It seems to me that the initial reactions of the authorities to Gulf War syndrome could hardly have been worse in terms of maintaining the confidence and trust of the Armed Forces and the populace. Indeed, that very alienation was likely to drive them into the arms of unhealthy supporters. The attitude that it was a storm in a teacup, or that those complaining really should be able to pull themselves together, or that it was possibly an attempt to get compensation were all talked of quite openly in medical communities. That is not a new view, as similar sentiments were expressed to and by the shell shock commission in 1922, but such views are now plainly unacceptable and ignorant.
	No wonder a serious lack of trust developed between the public and veterans on one side, and the Government and military authorities on the other. Let's face it: it was a good story, involving many contemporary issues of public concern about the environment. We should also face up to how Gulf veterans have been ill-served to date by junk science and by their so-called advisers. Far too many quacks and charlatans have taken advantage of them. That is why it is crucial, not only for Gulf War veterans but for the current conflict and future similar conflicts, that the Government assert their superior moral authority to protect and care for these people. They need to be a little more sophisticated than they have been to date about the consequences of modern warfare.
	My first question to the Government, then, is: what plans are in hand to ensure that they respond in timely manner to the inevitable emergence of the sequelae from the Iraq conflict, service in Afghanistan and future armed conflicts? Given the delays, obfuscation and generally resistive attitude to the Gulf War veterans, can we be reassured that it will not happen next time around and that the inevitable problems will be planned for?
	Secondly, what steps are the Government and the military taking to change the culture of what I would regard as "concrete thinking" about physical and psychological disorders? Did this not go out with Descartes? We must recognise that psychological outcomes are as real and disabling as physical disorders, and that psychological disorders are readily compounded by modest physical hazards. That is, overall, what the report of the noble and learned Lord, Lord Lloyd of Berwick, said, and what we all agree probably happened. Recruiting soldiers resilient to all types of stress is not feasible.
	Finally, what steps are the Government going to take to ensure that the current half of ex-servicemen—I am not talking just about the veterans—who now suffer from diagnoses of depression or anxiety yet who almost never receive any help from statutory services, and only rarely from service charities, can get the help they need?
	This is a wider question than just that of the Gulf War veterans. However, I echo the calls of the noble and gallant Lord, Lord Craig of Radley, and the noble Lord, Lord Morris of Manchester, for some closure and a greater understanding of the effects of military engagement.

Lord Truscott: My Lords, I pay tribute to the noble and gallant Lord, Lord Craig of Radley, for all the tremendous work he does on behalf of those who serve, and have served, in the British Armed Forces. Apart from a long and distinguished career in the RAF and the Ministry of Defence at the highest levels—as your Lordships' House has already heard—he has continued to work selflessly for organisations like the RAF Benevolent Fund and the "Not Forgotten" Association.
	The noble and gallant Lord, Lord Craig, and my noble friend Lord Morris of Manchester, who has himself done so much for disabled people and the Royal British Legion, have diligently pursued the Government in the interests of service veterans who served in the 1990-91 Gulf War and have suffered illness as a result. They, and the noble Baroness, Lady Murphy, are right to be concerned and have every right to hold the Ministry of Defence and the Government to account in your Lordships' House today.
	We have debated this matter before, in December 2004. Recently, both the noble Lord, Lord Morris of Manchester, and the noble and gallant Lord, Lord Craig of Radley, have elicited Written Answers on this subject from Ministers. In raising this matter today, the noble and gallant Lord is pushing at an open door. The acceptance by the Pensions Appeal Tribunal, last October, of the umbrella term "Gulf War syndrome" to cover the variety of symptoms linked to service in the 1990–91 Gulf War has, after all, been welcomed by the Ministry of Defence.
	In a Written Ministerial Statement last November, referring to the Daniel Martin case, my honourable friend the Veterans Minister in another place confirmed that this was the case:
	"The Government hope that the use of the umbrella term will address the known concern of some Gulf veterans that we have not recognised a link between their ill-health and the 1990–91 Gulf Conflict".
	However, he continued, the Government also welcomed the decision by the Pensions Appeal Tribunal, which,
	"found that there was no reliable evidence to show that Gulf War Syndrome is a discrete medical condition. This confirms the view which the Ministry of Defence has consistently taken and which is based on the overwhelming consensus of worldwide medical and scientific opinion".—[Official Report, Commons, 24/11/05; col. 128WS.]
	It is apparent from the MoD's statement that the PAT decision will make no difference to the way veterans will be treated and assessed. The MoD has explicitly said that its policy has always been to make awards in full where evidence of disablement is shown and where that disablement is due to, or aggravated by, service. It has consistently acknowledged that some veterans of the Gulf conflict have become ill, and that this ill-health may be due to their Gulf service. As the previous Minister for Veterans wrote in the Times in December 2004:
	"This Government has always accepted that some veterans of the 1990–91 Gulf Conflict have become ill and that some of this ill-health is related to their Gulf experience".
	While Gulf veterans have undoubtedly suffered a range of illnesses, the fact remains that the mortality rates—rather than general levels of illness—for veterans of the 1990–91 conflict are less than those of the age-adjusted "Era" comparison group of service personnel: 755 to 765. The 755 deaths among Gulf veterans compares with approximately 1,206 deaths expected in a similar-sized cohort taken from the general population of the UK with the same age and gender profile. This in turn reflects the emphasis on fitness when recruiting and retaining service personnel.
	While any death is a matter of great regret, the data show that veterans of the 1990–91 Gulf conflict do not suffer an excess of overall mortality compared to service personnel that did not deploy to the Gulf. So, despite what has already been said in the debate, neither would it, to my mind, be fair to give ex gratia payments to all Gulf veterans while ignoring those who served and suffered in other conflicts.
	I do not think that the Government have to respond further to the inquiry on Gulf War illnesses undertaken by the noble and learned Lord, Lord Lloyd of Berwick. My speech to your Lordships' House on 21 December 2004 laid out the reasons why I believed the report was flawed. I will not repeat all the arguments here, but I, unlike my noble friend Lord Morris, think that many of the statistics and facts in that report were incorrect, and, at the end of the day, it was based on the evidence of 35 veterans—a sample of 0.06 per cent of the 53,500 personnel who served in the first Gulf War.
	The report repeatedly referred to 6,000 veterans who suffered from ill health due to their service in the 1990–91 Gulf conflict. But, as the MoD made clear, many of those thousands of claims were for disablement and illnesses unrelated to service in the Gulf War. In fact, the number of Gulf veterans in receipt of pensions or gratuities for unspecified, symptomatic Gulf-related illnesses was approximately 1,400 at the end of 2004, less than 3 per cent of the personnel who served in the Gulf.
	I am glad that the MoD and the Government are committed to spending a total of about £8.5 million to research further into Gulf veterans illnesses. This work is vitally needed. I hope that the Minister will say more about the MoD's efforts in this regard in winding up the debate and assuage the heart-felt concerns raised in your Lordships' House today. The Ministry of Defence and the Government must never let up in their duty to provide the highest standard of care and support to Gulf veterans and their families, to whom this country continues to owe so much.

Lord Lloyd of Berwick: My Lords, perhaps I may start my contribution by paying a warm tribute to the noble Baroness, Lady Murphy. It is very refreshing to hear a new voice—at least to me—on this thorny subject. I hope that the Government will pay close attention to what she said.
	The Royal British Legion has been pressing for a public inquiry into Gulf War syndrome—we now can call it that—since 1997. The Ministry of Defence has never said yes and it has never said no. All it has ever said was that the time is not yet ripe, even after 14 or 15 years. It is still waiting, it says, for scientific proof, on the cause of the illnesses, despite the fact that there is scientific proof that those who served in the Gulf were twice as likely to suffer from these symptoms as those who served in Bosnia or remained at home.
	In answer to the speech of the noble Lord, Lord Truscott, I would say that this problem of Gulf War illnesses has never had anything to do with increased mortality; it is the problem regarding the symptoms, not necessarily leading to mortality, that has been beneath all the investigation. After pressing for so long, people lost patience and it was as a result of the noble efforts of the noble Lord, Lord Morris, that an independent public inquiry was in due course set up. I had the honour to be the chairman of that inquiry. It was never our remit to establish the scientific cause of the illness; it could not be and no one could have expected it to be. But it was our remit to establish the facts of how the veterans had been treated by the Ministry of Defence since their return from the Gulf. I propose to refer always to the Ministry of Defence, rather than to any particular Government. This is not a political issue. It is a coincidence that, in the 15 years since the first Iraq war, the Conservatives formed the Administration for the first half and there was a Labour Government for the second half. Although on coming to office in 1997 the Labour Government said that there would be a great new fresh start, I did not notice any difference.
	Since we were investigating the facts relating to how the Ministry of Defence had treated the veterans, it seemed only sensible to invite the Ministry of Defence to send a representative to attend our inquiry. The representative need have attended only for a very short time, but the ministry declined. It said that it would serve no purpose. It was wrong about that. It would have served a very important purpose. It would have reassured the veterans that the Ministry of Defence was taking their complaints seriously. It would have cost the Ministry of Defence nothing to attend, however briefly, to explain its position, but it did not do so.
	We listened to a great deal of evidence and, at the end, at the suggestion of the noble Lord, Lord Tyler, we renewed our invitation to the ministry to send someone to answer some of the questions that we wanted to put. I wrote in these terms:
	"You may have seen that Paul Tyler MP on 21st July said that your appearance would do more than anything to restore trust between the veterans and the MOD. Many of the veterans have echoed the same point in their evidence. Paul Tyler asked me specifically to renew my invitation, which I now do. It seems to me that it could do no harm, and might do much good".
	However, once again, that invitation was simply brushed aside. I am sorry to say that, once again, the Ministry of Defence lost another opportunity to reassure veterans that their interests and concerns were being properly taken into account.
	I must mention something that I find difficult to mention. Instead of explaining sensibly why the ministry would not come to address us, however briefly, it became obsessed with how our inquiry had been financed. Over and over again, in answer to my questions, it wrote back to say, "Why have you not answered that question?" I explained as clearly as I could that we were financed by a private charity that wished to remain anonymous. For some reason, the Ministry of Defence found that hard to accept. I hope that, when she replies, the Minister will explain why it was so obsessed by the problem of how we were financed and why the ministry pressed that point so hard and could not accept our assurance that we were financed by a private charity that wished to remain anonymous.
	I am sorry to say that, at one point, the Ministry of Defence went so far in reference to our inquiry as to put the word "independent" in quotation marks. That seems to suggest that, in the view of someone in the ministry, we were not truly independent. Again, I hope that the Minister, when she comes to reply, will specifically withdraw any suggestion that we were not independent. There was no evidence of any kind on which the Ministry of Defence could have put forward such a suggestion.
	We did not of course expect the Ministry of Defence to accept our recommendations overnight, but we did expect a considered response. A considered response is what we never got. Instead, the ministry argued—I am glad that the point has already been made—that we had failed to take account of the large amount of written material put before us because, if we had, we could not have reached the conclusions that we did. That is a marvellous example of Ministry of Defence logic.
	I agree that the Ministry of Defence put a large amount of material before us, much of it self-serving and suggesting simply that the Government were doing better than the Conservatives had done. The suggestion that we did not read that evidence—all three of us—was quite simply wrong and, I suggest, unworthy of a government department. Indeed, it was unworthy of the Prime Minister, who made exactly that point in a letter that he wrote to the right reverend Prelate the Bishop of Norwich on 17 October last year. Again, I hope that the Minister will specifically withdraw the suggestion that we did not read or take account of the ministry's evidence.
	One of the main issues at the hearing was the use of the term "Gulf War syndrome". We wanted to know why the ministry was so reluctant to accept that term—a term that was used by all the veterans and the public at large. Indeed, it was a term that the ministry itself was using until about 1997, when it suddenly changed tack—again, for reasons that were never explained. That was the issue in the Rusling case, which was decided in 2002. Sergeant Rusling had succeeded in establishing a basis for a claim on Gulf War syndrome. Yet the Ministry of Defence wasted a great deal of public money in appealing against that decision, only to lose on every issue that it had raised.
	That, of course, brings me to the decision of the Pensions Appeal Tribunal in the Martin case on 31 October. There, it was decided that Gulf War syndrome was the correct label for describing these symptoms. Indeed, by this stage, the Ministry of Defence actually conceded as much. We had taken the view that Gulf War syndrome was a sensible—indeed, medically correct—term, as we had been advised. In the Martin case, it was decided that it was not only sensible but correct in law.
	In any view, the Martin case was a defeat for the Ministry of Defence. But how did it deal with the case? Somehow—and it almost beggars belief—it tried to turn the case into a victory. Here, again, I refer to the statement which the Ministry of Defence made on 24 November:
	"The Government hope that the use of the umbrella term will address the known concern of some Gulf veterans that we have not recognised a link between their ill health and the 1990–91 Gulf conflict. We hope that this will help to provide an element of closure"—
	I am glad that the noble and gallant Lord, Lord Craig, highlighted that particular expression—
	"for those who have sought some acknowledgement that their ill health is connected to their Gulf service".—[Official Report, 24/11/05; col. WS 149.]
	How ungenerous can one be? An "element of closure"—it is a joy, a pure "Yes Minister" expression.
	It does not end there. The next letter was sent on behalf of the ministry to the Times. It stated:
	"However, there remains no basis for recognising Gulf War syndrome as a diagnostic label. The consensus of the medical community remains that there are too many different symptoms reported for this ill health to be characterised as a discrete medical syndrome".
	That is not only unjust and ungenerous, but plain wrong. The ministry seems to be incapable of distinguishing between a diagnostic label—and Gulf War syndrome was a correct diagnostic label—and a discrete pathological entity, which it clearly is not and that we never even suggested was.
	I am delighted that the noble and gallant Lord, Lord Craig, drew attention to the sentence in the Prime Minister's letter to the right reverend Prelate the Bishop of Norwich on 23 January 2006, when he said that the affairs of the Gulf War veterans will continue to be a top priority of this Government. If the Gulf War veterans have been the subject of top priority from the Ministry of Defence, one feels sorry indeed for those whose concerns have only a low priority.
	In answer in this House on 24 November, the Minister promised progress as a result of the Martin decision—

Baroness Royall of Blaisdon: My Lords, forgive me, I realise that we do not have a clock, but the noble and learned Lord has been speaking for almost 14 minutes.

Lord Lloyd of Berwick: My Lords, I inquired as to when the time is up and I understand that it is 6.46 pm. I may be wrong about that. In any event, I assure the noble Baroness that I am at the end of my remarks.
	One thousand three hundred and sixty-eight people have claimed on the basis of Gulf War syndrome and have had their claims defeated because of the attitude of the Ministry of Defence to that particular expression. Only one claim on that basis has succeeded. I want to ask: if the ministry is taking steps, has it written to the 1,367 others who claimed on that basis to say, "Sorry, we were wrong and you were right; this was the correct basis"? If the Minister can say that she has done that, I shall be gratified. If not, I hope that the ministry will do so quickly.

Lord Tyler: My Lords, I sincerely congratulate the noble and gallant Lord, Lord Craig, and thank him not only for initiating this debate but for his persistence in standing up for the victims of Gulf War-related illnesses. I also pay tribute to other Members of your Lordships' House, notably the noble Lord, Lord Morris of Manchester, with whom I have worked in the past on this issue, and the noble and learned Lord, Lord Lloyd of Berwick. His masterly and truly independent inquiry produced the report which gives rise to the debate.
	Unlike other noble Lords, I have no military, legal, medical or scientific expertise to put before your Lordships' House. However, I have a long commitment to get to the truth of this issue. Way back in 1994, I was approached by those in Cornwall and the south-west who were suffering from severe illness as a result of their service in the Gulf, including Major Christine Lloyd, to whom reference has been made. At that time, the suggestion was made that there might be a link between the cocktail of inoculations that troops suffered before they went to the Gulf, or the use of organophosphate pesticides, which was a special interest of mine, or a combination of the two, and that that was giving rise to these serious illnesses. I therefore tabled a Parliamentary Question in the other place to the then Defence Minister Mr Nicholas Soames, who answered on 3 November 1994 that organophosphates had been used only,
	"in delousing some 50 Iraqi troops with a dusting powder".—[Official Report, Commons, 3/11/94; col. W1237.]
	That proved to be misinformation. As your Lordships' House has already heard, we have had too much misinformation over the years. More than two years later, in December 1996, that same Minister, Mr Soames, had to make a grovelling apology to me in the other place and to the Commons. He had been wrongly briefed: several hundred British troops, their equipment and their living quarters had been sprayed with these extremely dangerous chemicals. The organophosphates had been bought locally in the Gulf with no clear warnings or treatment instructions in English. Unsurprisingly, there was a devastating result in certain cases.
	That episode convinced me that the Ministry had been casual and irresponsible in its attitude to the health of those who had been serving their country so well in the most dangerous conditions. Nothing I have subsequently learnt during my years of working with the noble Lord, Lord Morris, and the Royal British Legion to seek justice for those victims of official neglect has changed my view. I want to pay particular tribute to the persistence of the Royal British Legion; notably, to Colonel Terry English, who has done so much on behalf of veterans.
	In your Lordships' debate on 21 December 2004, my noble friend Lord Garden—who speaks with all the authority of a very distinguished service career, which obviously I cannot—said:
	"It is becoming slightly embarrassing for me to have to acknowledge that I worked in that Kremlin-like establishment, the Ministry of Defence, in the past. There is a real paradox between the ethos of the MoD and the individual armed services. In the Army, Navy and Air Force we are trained to look after our people in both peace and war. The duty of care extends from the top to the bottom . . . Yet what have we seen from the Ministry of Defence in recent times? Whether justly or not, its reputation is one of cover-up, lack of transparency and unwillingness to support the troops when they are in distress".—[Official Report, 21/12/04; col. 1728.]
	The Commons Select Committee made a similar comment in its 1995 report:
	"In responding to allegations of a Gulf War Syndrome MoD has been quick to deny but slow to investigate. MoD's response has been reactive rather than proactive and characterised throughout by scepticism, defensiveness and general torpor."
	We have heard so many examples in the debate this evening, particularly from the noble and learned Lord, Lord Lloyd.
	In the aftermath of the Pensions Appeal Tribunal decision in the case of Guardsman Daniel Martin last November, I and several Members of your Lordships' House questioned the Government on their grudging acceptance of the outcome. Today the Minister has a unique opportunity to show genuine generosity of spirit and awareness of the misery to our Gulf War veterans caused by so many official delaying tactics, so that she can correct the widespread perceptions to which so many of us are referring.
	Specifically, I ask the Minister, first, to give the House an estimate of the total cost—in legal fees and civil servants' time—of resisting the claimants' case for recognition and compensation. Secondly, in the light of today's report that Professor Robert Haley in the United States has been awarded an annual research budget of some $15 million to establish the truth of Gulf War syndrome, what steps are the Government taking to ensure that his results are immediately accessible and acted on in the United Kingdom?
	Thirdly, can she assure the House that each of the four simple recommendations contained in paragraph 283 of the Lloyd inquiry report have been, or are being, urgently implemented? First, that MoD should acknowledge that it was service in the Gulf that caused these illnesses; secondly, that "Gulf War syndrome" is an appropriate description; thirdly, that a fund for ex gratia payments should be set up; and fourthly, that the then 272 rejected claims should be reviewed? We know of course that there are many more now, as the noble and learned Lord, Lord Lloyd, said. Finally, bearing in mind the Martin and subsequent tribunal decisions, will the Minister further assure us that all outstanding similar cases will be speedily settled without further delay or unnecessary recourse to further tribunals, in the light of the precedent that has now been set?
	In his letter to the Times, dated 23 November 2005, Dr Jack Melling, former chief executive officer at Porton Down, wrote:
	"Gulf War veterans were found to experience significantly (26 to 32 per cent) more multi-symptom illness than veterans who did not serve in the Gulf and also more than veterans of the Bosnian conflict. Their conditions could not be explained by wartime stress or psychiatric illness. There is also growing evidence that an important component of Gulf War veterans' illnesses is neurological in character".
	He concluded:
	"Even though we cannot yet prove a causal relationship between the specific toxic insults to which veterans were exposed and each illness symptom, once it is accepted that service in that theatre of war is linked to a heightened risk of illnesses coming under the GWS umbrella label, the burden of proof on the veteran for the cause of their illness is lightened. Is this why the Ministry of Defence so resists the term Gulf War Syndrome?".
	Today, the Minister can not only answer that very apposite question, but can also put to bed, once and for all, the absurd official semantic game surrounding the GWS term.
	In our exchanges on 24 November, the Minister tried to reassure me and the House that the United Kingdom Government were no less anxious to be generous to veterans than the US Administration. That was not my impression when I gave evidence to the inquiry here in Parliament. Now, this massive investment of public money and the work of Professor Haley surely prove us right. The effect on service families must be disastrous. The impression given that the Ministry of Defence simply does not care for them will affect future recruitment and retention even if it does not do so already. After 15 years, those who have risked their lives and their long-term health in the service of their country in the Gulf deserve recognition and justice. Instead of further procrastination, we and they surely now need a firm promise of action this day.

Lord Luke: My Lords, I, like everyone else, am most grateful to the noble and gallant Lord, Lord Craig of Radley, for introducing this debate. I begin my contribution by making it clear that we on these Benches have every sympathy for veterans and ex-servicemen and women who have risked their lives for this country, some of whom now feel that it has let them down. Our servicemen and women deserve the very best, both by provision of the right equipment and resources when they go to war and the support that they get on their return home after the conflict is over, and also when they have left the Armed Forces. It goes without saying that it is crucial that the United Kingdom, through the Ministry of Defence, properly compensates with financial assistance members of the Armed Forces for ill health arising from their military service.
	One of the veterans' main grievances is the way in which the MoD has handled their cases and the fight for awards through the war pensions scheme that they have had to undertake. I agree wholeheartedly with the call of the noble and gallant Lord, Lord Craig of Radley, for Her Majesty's Government to express their regret about the long and protracted delays experienced by veterans in the pursuit of their claims and the truth about their illness. When a person of such considerable experience and knowledge of the armed services, and in particular of the operational circumstances during the Gulf conflict, makes such a call, the Government should certainly sit up and take note.
	The fact that the MoD did not choose to give evidence to the inquiry chaired by the noble and learned Lord, Lord Lloyd of Berwick, has been perceived by the veterans as symptomatic of the dismissive approach by the MoD to the whole problem of the Gulf War veterans. As the noble and gallant Lord has said, this attitude has done nothing to improve relations with the veterans. I mention this particular grievance in the hope that every effort should be made by the MoD to be seen as open and constructive as possible from now on.
	This debate is set in the context of the Government's ambivalence towards our veterans. The debt of honour due to them is not being repaid. The burden of proof is now on a veteran to prove that his or her injuries were due to their service, whereas under the previous war pension scheme, the onus was on the MoD to prove that injuries were not due to service. This is just one example of how, step by step, our Armed Forces are being equated with ordinary civilian professions. This is simply not right. The Armed Forces stand alone in what they are asked to do and this uniqueness needs recognition.
	I have said already, and must reiterate, that I agree with very much of what the noble and gallant Lord, Lord Craig of Radley, said in his speech. The noble and gallant Lord is and has been a most valiant advocate of the veterans' cause. There are, however, some who might question the significance of one aspect of his speech; namely, the call for the Government to confirm their acceptance of the phrase "Gulf War syndrome" as an umbrella term covering any medical condition caused by service and connected to the 1991 Gulf conflict. The Government have already had to accept the use of "Gulf War syndrome" as an umbrella term, but does it really advance the issue further? I submit that it is only useful in as much as the veterans feel it is a step in the right direction.
	The Pensions Appeal Tribunal ruling in November 2005 was conclusive in finding that there was no reliable evidence that Gulf War syndrome is—as has been mentioned several times this evening—a discrete pathological entity. The ruling found that there is a Gulf War health effect, this being an increase in the incidence and severity of a variety of symptoms for Gulf War veterans. The crucial point is that it seems there is no identifiable set of symptoms unique to those with Gulf War service. There is an argument that it might, therefore, be more useful to adopt the Pensions Appeal Tribunal's use of the term "health effect" to differentiate this occurrence of a range of accepted symptoms from a new specific syndrome.
	However, the real question to address is "what next?" We support the idea, proposed in the report of the noble Lord, Lord Lloyd, that the 272 unsuccessful cases should be reviewed. It would be helpful for the Government to indicate what steps they have taken, or will take, in this regard. We also support the noble and gallant Lord's call for the Government to commit to achieving a conclusion to all this. A real acknowledgement of the difficulties that the veterans have had to endure would be appropriate. I fully support the noble and gallant Lord's suggestion that Ministers should meet veterans and their representatives as soon as possible to try to achieve a satisfactory conclusion. Veterans are demanding this and, 15 years on, it is what they deserve. I look forward to the reply of the noble Baroness.

Baroness Crawley: My Lords, in thanking the noble and gallant Lord, Lord Craig of Radley, I acknowledge his tenacity in following this issue, and the very professional expertise he brings to the subject. I was warned by my noble friend Lord Morris of Manchester that I would probably need an ejector seat for this debate, as feelings are running very high. Indeed, it has been a robust debate—and so it should be—but also an extremely informative one, which we will read very carefully at the Ministry of Defence.
	The MoD has drawn a certain amount of flak, not all of it, I might suggest, deserved. However, I am grateful to the noble and gallant Lord for securing time for this debate, because this is an extremely important issue and I recognise that the concerns he raised, which have been shared by other noble Lords through their contributions this afternoon, are also felt by many outside this House.
	It is essential that these issues should be fully debated and that the views of the House are carefully considered. Noble Lords will recall that my noble friend Lord Bach set out the Government's response to the report of the noble and learned Lord, Lord Lloyd, during the debate held on 21 December 2004. I should like to say to the noble and learned Lord that I pay particular tribute to his work on behalf of veterans. However, there have been a number of developments since that response was given and I welcome the opportunity to update the House on the Government's position.
	As my noble friend Lord Bach made clear, we studied the noble and learned Lord's report carefully. We concluded at the time that it did not contain any new substantive or scientific evidence to support its conclusion and main recommendations. We have seen nothing since to change our view. The noble and learned Lord said that we should acknowledge that Gulf veterans are ill. My noble friend Lord Drayson said on 21 July 2005 that we have always accepted that, since returning from the Gulf in 1990 and 1991, some veterans have become ill and, where the evidence supports it, we have accepted that this ill health is related to their service in the Gulf.
	The Government have again been criticised in today's debate for not participating in the noble and learned Lord's investigation. We did not do so because we do not consider that an inquiry, public or unofficial, would contribute to answering the basic question of why Gulf veterans report more ill health than those who did not deploy. We have maintained that—and I should say to noble Lords that researchers into the illness of Gulf veterans did attend the inquiry—research independently overseen rather than any form of public inquiry or investigation will best allow us to understand and help veterans and their families to address these issues.
	However, we provided a significant amount of published material to inform the investigation. I understand that the noble and learned Lord was encouraged by the format of that material. We do not consider that it was taken fully into account in his report. The report does nothing to change the fact that the wide range of research that we and others have sponsored over the years has shown no unique illness associated with service in the Gulf. As my noble friend Lord Truscott observed, to date we have spent over £8 million on research. The United States Government have undertaken some $300 million-worth of research and we have always monitored it closely for any lessons it may offer for our own veterans.
	One of our first actions on taking office was to announce a package of measures aimed at addressing veterans' concerns. With such significant sums spent on research, I can say that our understanding of the ill health reported by 1990 and 1991 Gulf veterans is now much greater than when this Government first came to office. We have remained committed to the assurances we gave in that document, and this commitment continues today.
	I find it difficult to understand, therefore, that some Members of this House remain unwilling to acknowledge the very real progress the Government have made with this important and complex issue. This is true not least of the report of the noble and learned Lord, Lord Lloyd. It has a tendency to concentrate on the problems experienced prior to May 1997, rather than any of the efforts that we have made since to find solutions and to help veterans. Nor does it acknowledge the way in which we have applied the lessons of the 1990–91 Gulf conflict to improve the position for the current Iraq deployment.
	The Government recognised that we needed to be as transparent as possible about these sensitive medical and scientific issues. In contrast, we still find it somewhat surprising that the noble and learned Lord has been unwilling to disclose who sponsored and funded his investigation, thus raising questions about its true independence.
	Let me make it clear—as the noble and learned Lord, Lord Lloyd, raised it himself in this debate—that his good intentions and those of his fellow panel members have never been doubted. But this House would expect full transparency of funding of our research and we can see no reason why his own investigation cannot meet that same widely respected protocol.

Lord Lloyd of Berwick: My Lords, what was doubted or seemed to be doubted was our independence. It is in relation to that that I would like, even now, a specific assurance.

Baroness Crawley: My Lords, it is extremely difficult to pronounce on independence when one does not know who is funding and sponsoring a report. I think that that is the dilemma that the Government find ourselves in. As I said, we have no problem, and we have made it clear that the good intentions of the noble and learned Lord and his fellow panel members have never been doubted. I hope that, by my repeating that, he will know that the Government are sincere.
	The noble and learned Lord's report suggests that 6,000 veterans are suffering from ill health due to service in the Gulf conflict. This figure is based on veterans who served in the Gulf in 1990–91 who have claimed a war pension. Many of their claims will be for disablements and illnesses arising from other parts of their service in the Armed Forces, unrelated to their service in the Gulf.
	At the time of the publication of the report, the number of veterans in receipt of pensions or gratuities for unspecified, symptomatic Gulf-related illness was approximately 1,400, less than 3 per cent of the personnel who served in the Gulf. The personnel serving in the Gulf numbered 53,462. Nor is the report fair regarding the numbers who have been compensated under our "no fault" scheme. Only some 100 claimants failed to receive an award for Gulf-related illness, not the 272 stated by the report.
	The noble and learned Lord also recommended that compensation or ex gratia payments should be paid to Gulf veterans. There I can only agree with my noble friend Lord Truscott—Gulf veterans already receive financial benefits through the war pensions scheme and Armed Forces occupational pension scheme. These are quite explicitly set to reflect the level of disablement resulting from illness or injury. We see no justification for making additional payments to particular Gulf veterans, thus giving one group of veterans more favourable treatment than others. I admit to being surprised that the noble and learned Lord saw merit in such a potentially unfair and divisive arrangement.
	I now turn to the Pensions Appeal Tribunal decision of 31 October 2005. My honourable friend responsible for veterans made it clear in his Statement on 24 November 2005 that the Government welcomed the decision by the tribunal in the case of Guardsman Daniel Martin. The tribunal accepted the use of Gulf War syndrome as an umbrella term for ill health caused by service and connected with the 1990–91 Gulf War. We know that some veterans have been concerned that the link between their ill health and their service in the Gulf has not been recognised. The tribunal's decision gives a formal means of providing such a recognition, and it is for this reason, not least, that we welcome it.
	The decision was equally helpful in reaching the clear conclusion that Gulf War syndrome does not exist as a discrete pathological entity. In other words, we accept that there are clear symptoms of illness, and in some cases these are severely disabling, but the tribunal confirmed that there is insufficient reliable evidence to support the view that there is some specific new disease caused by service in the Gulf. This, as your Lordships will be aware, is the view that the Ministry of Defence has consistently taken on Gulf War syndrome, based on expert medical and scientific opinion. The UK is not alone in this respect. No other country that sent troops to the Gulf recognises Gulf War syndrome as being a specific disease or condition. I should stress here that, contrary to some views, the United States authorities have not recognised Gulf War syndrome.
	Perhaps it would be helpful to your Lordships if I explained briefly what the Ministry of Defence understands by the use of the umbrella term, and how we are applying it. First, it does not, as has been claimed in some parts of the media, represent a complete policy reversal by the ministry. For the reasons I have already mentioned, it does not involve the acceptance of Gulf War syndrome as a specific recognised disease; nor does the use of the umbrella term alter the MoD's position with regard to making an award under the war pensions scheme. It has never been the case that the department required that there be some particular label for an illness before a pension could be paid; the MoD awards in full whenever evidence of disablement is shown, and where this disablement is due to, or aggravated by, service. The acceptance of the umbrella term has not changed this fundamental feature of the war pensions scheme.
	I should explain the position the Ministry of Defence takes concerning the use of the diagnostic label, "Signs and Symptoms of Ill-Defined Conditions", more commonly known as SSIDC. This is a diagnostic category within the World Health Organisation International Classification of Diseases, and has been mentioned in the debate today. It is used to describe ill defined symptoms and illnesses where there is no identifiable underlying disease. The evidence is that similar symptoms occur in service personnel who did not deploy to the Gulf, and in the general population. The difference is that the reported occurrence in Gulf veterans is significantly higher. We therefore accept the Gulf ill health effect, and give eligibility for compensation by using the widely recognised category SSIDC.
	The Martin decision used "Gulf War syndrome" to cover not just Gulf illness, or SSIDC, but all other accepted conditions the tribunal considered to be causally linked to the 1990–91 Gulf service. I should mention that SSIDC remains in wide use throughout the world, including in Gulf studies published in the peer-reviewed medical literature.
	How will the umbrella term be used? Following the statement by the Minister for Veterans, the Veterans' Agency will proceed as follows in cases where Gulf War syndrome is given as an umbrella term: the agency will list the accepted medical conditions, together with a separate assessment of the levels of disablement arising from each. It will then ensure that the certificate that it issues to record an award makes clear that the umbrella term applies to accepted conditions which are connected with 1990–91 Gulf War service. The umbrella term in this way provides the recognition that many veterans have sought of the link between their ill health and their service in the Gulf.
	I should make it clear that there will be no direct increase in awards paid because of the inclusion of the umbrella term in an individual's assessment of his disablement. All disablement that is accepted as due to service will be, or will already have been, reflected in making an award.
	There has been some criticism—my noble friend Lord Morris of Manchester and the noble and gallant Lord, Lord Craig of Radley, reiterated that criticism today—that the department has taken too long to recognise the connection between a veteran's ill health and their service in the Gulf. However, the principal issue raised by veterans claiming Gulf War syndrome before the Martin decision was that their conditions should be recognised as resulting from one specific Gulf-related disease. As I have said, there was, and remains, no scientific basis for doing this. The proposal to use Gulf War syndrome in a broader sense as an umbrella term is a new one. We have recognised the need to bring an element of closure—I disagreed with the view of the noble and learned Lord, Lord Lloyd, when he questioned the Government's good faith in using that term; the noble Baroness, Lady Murphy, also mentioned closure—for those who have sought some acknowledgement that their ill health is connected to their 1990–91 Gulf service. I hope that noble Lords will recognise and welcome this step.
	I should add that at a Veterans Forum meeting chaired by the Minister for Veterans in December last year, the senior veterans organisations welcomed that development and considered the Government's move to be positive. It is sincerely hoped that we can build on this and that it will, indeed, help to provide an element of closure.
	Noble Lords have asked me many questions this afternoon. I had originally 12 minutes in which to answer. Due to the overrun of time and so on I did not end up with 12 minutes. I hope that noble Lords will be patient when I say to them that I will certainly write to each one of them and answer each of their questions as I have run out of time.

House adjourned at twenty-two minutes before seven o'clock.
	Thursday, 2 February 2006.